Bangladesh inks $400m loan agreement with WB for urban development
The signing ceremony took place at the Economic Relations Division (ERD) in Dhaka today (22 December), according to a press release
The Bangladesh government has signed a $400 million loan agreement with the World Bank's International Development Association (IDA) to implement the Resilient Urban and Territorial Development Project (RUTDP).
The signing ceremony took place at the Economic Relations Division (ERD) in Dhaka today (22 December), according to a press release.
Farid Aziz, additional secretary of the ERD, represented Bangladesh government, while Abdoulaye Seck, the World Bank's Country director, signed the agreement on behalf of the IDA.
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The event was attended by officials from various government ministries, senior World Bank representatives, and journalists.
The RUTDP project will be executed under the Local Government Division and implemented by the Local Government Engineering Department (LGED), said the media release.
The project, scheduled to continue until June 2030, aims to improve basic urban services, including operations and maintenance, while fostering good governance, enhancing financial management, and boosting municipal revenue generation.
Additionally, the initiative focuses on strengthening the institutional capacity of municipalities and city corporations to enable effective and sustainable planning, financing, implementation, and maintenance of urban services.
The project is expected to construct climate-resilient urban infrastructure and facilities, directly benefiting 17 million people living in 81 municipalities and six city corporations across the country.
The $400 million loan is divided into two components. The first component is a $300 million Shorter Maturity Loan (SML), equivalent to SDR 227.7 million. This interest-free loan is repayable over 12 years, including a six-year grace period, and carries an annual commitment fee of up to 0.50% on undisbursed amounts.
The second component is a $100 million loan from the Scale-Up Window (SUW), equivalent to 15.7 billion Japanese Yen. This loan is repayable over 35 years, including a four-year grace period, and bears interest at the Reference Rate Plus Variable Spread (TONA). It also includes a one-time front-end fee of 0.25% and an annual commitment fee of 0.25% on undisbursed funds.
