The bank will provide the amount, 19.4 million in euro, on behalf of the German government, a media statement from the German Embassy in Dhaka said on Wednesday.
The money from the German funds will be aligned with other external assistance in the health sector, it said.
The fund will support Bangladesh in achieving the health related Millennium Development Goals in such fields as maternal health, nutrition, reproductive health, family planning, control of non-communicable diseases and immunisation.
Abul Mansur Md Faizullah, Joint Secretary of Europe Wing of the Economic Relations Division, and Director of KfW Office in Dhaka David Kunze signed the agreement.
Economic Relations Division secretary Abul Kalam Azad and the German Ambassador to Bangladesh Albrecht Conze witnessed the ceremony.
Conze highlighted the achievements in the health sector such as the reduction of child and maternal mortality in recent years and encouraged Bangladesh government to address the remaining challenges by reforming the health sector and providing an increased share of budgetary funds.
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