The United Nations Development Programme (UNDP) and Germany agreed that the Federal Foreign Office will grant 1.1 million euros for a project in Cox's Bazar.
The funds will be used to implement 'Support to Community Stabilisation and Resilience' project in Ukhia and Teknaf sub-districts of Cox's Bazar.
The project will jointly be implemented by the UNDP and the UN Entity for Gender Equality and the Empowerment of Women (UN Women).
The agreement was signed by German Ambassador Peter Fahrenholtz and UNDP Bangladesh Country Director Sudipto Mukerjee on Sunday at the German embassy in Dhaka, said UNDP officials.
Shoko Ishikawa, country representative of UN Women, also a project partner, attended the event with Kyoko Yokosuka, UNDP Bangladesh deputy country director.
The year-long project aims to establish community security and gender-responsive policing in Cox's Bazar.
The district is reeling under the pressure of the most concentrated and fastest-growing refugee crisis in the world since the latest Rohingya influx in August 2017.
Its population has more than tripled.
Cox's Bazar was already struggling, before the influx, to address high levels of poverty-40 per cent higher than the national average.
On top of that, government services for host communities are stretched very thin, due to added pressure from the camps, leading to dissatisfaction inside the host community.
The influx has further increased pressures on local infrastructure, and tensions are rising even within households.
The project aims to address the impact of the influx on host communities and governance institutions while promoting social cohesion and stability.
It will also engage and train local leaders to build their capacities to respond to increasing tensions and grievances.
A comprehensive support package will be provided to the police to improve security, and improve the quality of responses, especially for women and children.