Finance minister seeks more soft loans from World Bank
Bangladesh also expects $500 million in budget support this financial year
After last week's agreement in Dhaka with the IMF for $4.5 billion loans with the first instalment expected by February, Bangladesh now hopes for $500 million budget support from the World Bank in the current fiscal year and another $500 million in the next two fiscal years.
Bangladesh has also sought more financial assistance at low interest from the $93 billion financial package announced by International Development Association (IDA), the World Bank's soft-lending arm, to offset the economic fallout arising from the Covid-19 pandemic and the Russia-Ukraine war.
Finance Minister AHM Mustafa Kamal made the request after World Bank Vice President for the South Asia Region Martin Raiser, accompanied by Abdulaye Sek, World Bank's new country director for Bangladesh and Bhutan, paid a courtesy call on him at the Secretariat on Sunday.
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The $93 billion IDA20 financial package was finalised last year for supporting IDA countries for fiscal years 2022-25 with loans at a zero or very low interest charge and repayment period of over 30 to 40 years. The finance minister appreciated the IDA20 package and said it would be very helpful for IDA countries to recover their economies from the shocks.
He also requested the World Bank to align its Country Partnership Framework for Bangladesh for 2023-27, which is in the making now, with the country's long-term visions – becoming a middle-income nation by 2031 and developed one by 2041.
"I have requested to formulate a new CPF of the World Bank in coordination with these plans of the government," the finance minister said.
Following the meeting, the Ministry of Finance said it expected to further receive $500 million in budget support from the World Bank this financial year, with $250 million more provided in the next two fiscal years each.
Finance ministry officials said in the next two fiscal years, $500 million in budget support will be made available under the Bangladesh Green and Climate Resilient Development Credit.
Besides, a loan proposal of $6.15 billion from the World Bank for 2023-25 is also in the pipeline, the Finance Division said.
The finance minister said since independence, the global money lender has pledged a total of $37 billion in loans and grants to Bangladesh, of which $26.6 billion has so far been disbursed.
Bangladesh has paid $6.36 billion in interest on these loans.
The finance minister also requested the World Bank to finance projects to revive the rivers around Dhaka, ensure navigability and enhance the beauty of Dhaka, which the global money lender agreed to, he added.
Kamal further highlighted the progress of implementation of various projects with World Bank loan assistance.
Finance Division Senior Secretary Fatima Yasmin and Economic Relations Division (ERD) Secretary Sharifa Khan were present in the meeting.
Before the meeting with the finance minister, the World Bank officials held a separate meeting with the senior officials of the ERD, where the budget support was also discussed.
