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Dhaka, Sept 13: The World Bank will lend $300 million to Bangladesh to restructure and develop its state-run railway, a senior official with the bank said on Wednesday.

The loan will be disbursed in two installments, he added.

Bangladesh has about 2,855 km (1,784 miles) of railway lines, but they carry only 10 percent of goods containers to and from the country's two ports in Chittagong and Mongla, officials said.

Bangladesh Railway, which employs 35,000 people, has long been an ailing state enterprise, losing 2.49 billion taka ($36.1 million) in the fiscal year to June, 2006.

The World Bank is supporting the expansion of the railway network in Bangladesh, home to 140 million people, as it is a safer, more economical and environmentally friendly mode of transport, said the official, who did not wish to be identified.

The Asian Development Bank and the Japan Bank for International Cooperation will also provide loans to the railway sector, he added.

Bangladesh has 20,000 km of highways. With 6 to 7 percent economic growth and transport demand rising at up to 10 percent annually, transport capacity must increase four-fold within the next 25 years, the World Bank official said.

(US$1 = 68.94 taka) REUTERS