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“Bangladesh, World Bank ink $2.25bn loan deal for 5 projects”

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Bangladesh has secured a $2.25 billion loan from the World Bank, which will be utilized to develop multiple sectors, such as regional trade and connectivity, disaster preparedness, and environmental management.

The financing agreements were signed by Sharifa Khan, the secretary of the Economic Relations Division, and Abdoulaye Seck, the Country Director of the World Bank in Bangladesh. The Ministry of Finance released a press statement confirming the loan agreement between Bangladesh and the World Bank.

During the signing of the financing agreements, both Prime Minister Sheikh Hasina and World Bank President David Malpass were in attendance.
The loan agreement, which amounts to $2.25 billion, encompasses five distinct projects.

The first of which is the $753.45 million, Accelerating Transport and trade connectivity in Eastern South Asia (ACCESS) – Bangladesh Phase-1 Project. This project aims to improve the effectiveness and resilience of regional trade and transportation in Bangladesh and will be overseen by the National Board of Revenue, Roads and Highways Department, and Bangladesh Land Port Authority. Implementation of the project is scheduled to take place from July 2022 to June 2028.

Another project included in the loan agreement is the Resilient Infrastructure Building Project (RIVER), with a budget of $500 million. The main aim of this project is to minimize the vulnerability of the population residing in cyclone and flood-prone coastal areas of Bangladesh. Furthermore, the project seeks to provide secure shelter for humans and their resources, including livestock, during natural calamities such as cyclones, tidal surges, and floods. The Local Government Engineering Department of the Local Government Division will oversee the implementation of the project over a six-year period, from July 2022 to June 2028.

Included in the loan agreement is the $500 million First Bangladesh Green and Climate Resilient Development (GCRD) project, which aims to support the government’s transition towards sustainable and climate-resilient development. The project’s objectives are twofold: to improve public planning, financing, and delivery of eco-friendly and climate-resilient initiatives, and to promote sector reforms that enhance greener and more efficient production and services. The main implementing agency for this program is the Finance Division, and the budget support will be disbursed by June 30, 2024, subject to the fulfillment of specific prior conditions.

Also included in the loan agreement is the $250 million Sustainable Microenterprise and Resilient Transformation (SMART) project. This project’s primary objective is to promote sustainable and resilient green growth of microenterprises (MEs) in Bangladesh. The project intends to drive the transformation of the microenterprise sector into a more dynamic, lower-polluting, resource-efficient, and climate-resilient sector. Palli Karma-Sahayak Foundation (PKSF) will be responsible for the implementation of the project, which will take place over a period of six years, from 2023 to 2028.

The loan agreement also includes the $250 million Bangladesh Environmental Sustainability and Transformation (BEST) project. The project’s primary objective is to enhance the Government of Bangladesh’s capacity for environmental management and to reduce pollution discharges. The Department of Environment (DOE) will lead the project’s implementation, with support from other agencies such as the Bangladesh Road Transport Authority (BRTA), Bangladesh Bank, and Bangladesh High-tech Park Authority (BHTPA). The project will be carried out over a period of five years, from July 2023 to June 2028.

 

Terms & Conditions

Bangladesh is receiving four out of five loans from regular IDA, with the First Bangladesh Green and Climate Resilient Development (GCRD) being the only one with both a Regular IDA loan ($176 million) and a Short-term Maturity Loan ($324 million). The Regular IDA loans are repayable over a period of 30 years, with a five-year grace period, and a service charge of 0.75% per annum and interest rate of 1.25% applied to the withdrawn amount. Additionally, a maximum annual commitment fee of 0.50% is payable on the unwithdrawn financing balance, although this has been waived by the World Bank for Bangladesh for many years, including the current financial year. The Short-term Maturity Loan, on the other hand, must be repaid over a period of 12 years, with a grace period of six years, and no service charge or interest applied to the withdrawn amount. The World Bank has been a key development partner of Bangladesh since 1972, committing a total of $40.4 billion in loan assistance and $722 million in grants for the country under 368 projects/programs.

 

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Major American Corporations Eye Investments in Bangladesh: State Minister

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State Minister Ahsanul Islam

State Minister for Commerce Ahasanul Islam Titu announced on Tuesday (May 28) that major American conglomerates, including Amazon, Chevron, Coca-Cola, and Boeing, are showing keen interest in investing in Bangladesh.

“We are working to streamline the investment process for American companies, ensuring they can operate smoothly without any obstacles,” State Minister Titu told reporters following a meeting with a delegation from the US-Bangladesh Business Council at the Ministry of Commerce.

The minister highlighted that the discussion focused on simplifying investment procedures and removing any barriers that might deter new American companies from entering the Bangladeshi market.

A representative from Amazon attended the meeting, where discussions centered on the potential for Amazon to integrate Bangladeshi products into its global supply chain and enhance the local e-commerce infrastructure. “Amazon is looking into establishing a central warehouse in Bangladesh to facilitate regional and international product distribution,” Titu added.

The US delegation also explored opportunities in energy, digital payments, and startup sectors.

Titu outlined the primary goals of the United States-Bangladesh Business Council: improving market access for Bangladeshi products, facilitating US investments in Bangladesh, and strengthening bilateral relations. These efforts align with the government’s Smart Bangladesh strategy aimed at strategic growth.

Addressing concerns about some American companies withdrawing their investments from Bangladesh’s capital market, Titu emphasized the importance of welcoming international conglomerates. “If Facebook, Amazon, Chevron, Coca-Cola, and Boeing become involved in Bangladesh’s business landscape, it will significantly ease the country’s progress,” he stated.

Titu also mentioned Bangladesh’s scheduled graduation from the Least Developed Countries (LDC) category in 2026 and stressed the importance of securing market access in various countries within the next two years.

He assured that the government is committed to attracting international investors through policy support, emphasizing Bangladesh’s potential as a significant market with a stable government expected for the next five years.

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Bond Market Reforms Key to Investment Growth: Salman F Rahman

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salman f rahman

Prime Minister’s Private Industry and Investment Adviser Salman F Rahman today underscored the need to bolster the country’s capital market to secure funding for investors.

“Globally, the capital market is the primary source for raising finance for investors. However, in our country, businessmen typically rely on bank loans for mid-term investments or expansion. We are working towards improving the bond market,” he stated.

Salman made these remarks following a meeting with an executive business delegation from the US-Bangladesh Business Council at the Bangladesh Investment Development Authority (BIDA) Bhaban in the city, sources said.

The meeting was attended by Board Chair of the US-Bangladesh Business Council and President and CEO of Excelerate Energy, Steven Kobos, along with President of the US-Bangladesh Business Council and South Asian Vice President of the US Chamber of Commerce, Ambassador (ret) Atul Keshap, among others.

Speaking to reporters, Salman mentioned the government’s efforts to safeguard the capital market from manipulation. “Share prices depend on the market. The government never interferes in this regard. The primary role of the government is monitoring,” he added.

He also highlighted the importance of institutional investors in strengthening the country’s capital market.

Moreover, Salman noted that US entrepreneurs have shown increased interest in investing in Bangladesh, recognizing the current government’s various development initiatives.

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PM Sheikh Hasina Seeks U.S. Business Support for ‘Smart Bangladesh’ Vision

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Sheikh Hasina

Prime Minister Sheikh Hasina today called on U.S. businessmen to support Bangladesh’s goal of becoming a developed and smart nation by 2041. Addressing a delegation from the US-Bangladesh Business Council at her official residence in Ganabhaban, she emphasized the importance of their partnership in this transformative journey.

“We aim to become a ‘Smart Nation’ by 2041. Your support in enhancing our global competitiveness and expanding our export base is crucial,” she said.

The Prime Minister highlighted Bangladesh’s imminent graduation from a “least developed” to a “developing” country in 2026, attributing this progress to sustained efforts over the last 15 years. “Our efforts have led to Bangladesh being recognized globally as a ‘Role Model of Socio-Economic Development’,” she stated, citing good governance, the rule of law, rural investment, women’s empowerment, and ICT advancements as key factors.

Sheikh Hasina noted the longstanding economic and developmental partnership with the U.S., which is Bangladesh’s largest export destination and source of foreign direct investment. She expressed optimism about further strengthening this relationship.

“To protect our economy from current pressures, investment—both domestic and foreign—is vital. The implementation of Bida’s One Stop Service (OSS) will facilitate this,” she said, addressing the OSS implementation progress review meeting at the Bangladesh Investment Development Authority’s (Bida) headquarters.

She urged the U.S. business community to invest in Bangladesh’s high-potential sectors, including renewable energy, shipbuilding, pharmaceuticals, and ICT. “We are establishing 100 Special Economic Zones (SEZs) and 28 hi-tech parks, making Bangladesh a prime destination for IT investments,” she added.

Highlighting Bangladesh’s competitive advantages, she mentioned the availability of a young, skilled workforce at competitive wages and the country’s liberal investment policy. She reassured investors of the government’s commitment to improving the investment environment.

In response to the Prime Minister’s address, Bida Executive Member Mohsina Yasmin presented a report on OSS progress, while NBR Chairman Abu Hena Md Rahmatul Muneem assured the business community of considering logical amendments to the Customs Act.

Sheikh Hasina underscored Bangladesh’s significant socio-economic achievements, including reduced poverty rates, increased life expectancy, and higher literacy rates, particularly among women. She noted that Bangladesh is currently one of the world’s fastest-growing economies, projected to be the 25th largest by 2030.

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