The master plan will involve the northern seafront at the Esplanade in George Town.
PENANG has secured a US$10mil (RM41.4mil) adaptation fund from the World Bank for projects to address climate change which has caused floods and rising temperature.
State local government committee chairman Jagdeep Singh Deo said the application that was coordinated by the World Bank had been approved and the US$10mil fund had been principally approved.
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