World Bank Commits Over $1.1 Billion to Boost Human Development and Climate Resilience in Bangladesh
Under the IDA concessional loans, Bangladesh benefits from a 30-year maturity period, including a five-year grace period.
Dhaka: In a significant move towards fostering resilient and inclusive growth in Bangladesh, the World Bank has inked five financing agreements with the nation, totaling over $1.1 billion. The agreements aim to propel human development and enhance climate resilience in the South Asian country.
The signing ceremony took place today, with Sharifa Khan, Senior Secretary of the Finance Ministry’s Economic Relations Division, and Abdoulaye Seck, Country Director for the World Bank, sealing the deals on behalf of their respective entities.
Out of the total funds, a substantial $1,022 million comes from the International Development Association (IDA) concessional window, while the remaining $90 million is sourced from the Regular Scale Up Window (SUW), constituting non-concessional financing.
Under the IDA concessional loans, Bangladesh benefits from a 30-year maturity period, including a five-year grace period. The interest rate stands at 1.25%, coupled with a 0.75% service charge. On the other hand, SUW carries an interest charge of Reference rate+ Variable spread, with a commitment charge of 0.25% and a front-end fee of 0.25%.
“Bangladesh is an important partner for the World Bank toward its vision of a world free of poverty on a livable planet. Since the country’s independence, the World Bank and Bangladesh have had an impactful partnership that lifted millions of Bangladeshi people out of poverty,” remarked Abdoulaye Seck, the World Bank Country Director for Bangladesh and Bhutan. “These projects will help prepare our children for a brighter future while improving resilience to climate change.”
The five projects encompass diverse sectors, reflecting a holistic approach to development. They include:
Bangladesh Enhancing Investments and Benefits for Early Years Project ($210 million): Focused on improving early childhood development, this project will provide cash transfers and counseling services to approximately 1.7 million pregnant women and mothers of children under 4 years in vulnerable households.
Learning Acceleration in Secondary Education Operation Project ($300 million): Geared towards strengthening secondary education, this initiative aims to enhance learning outcomes and teaching quality. It introduces a blend of online and in-class education to recover from COVID-19-induced learning losses, coupled with stipends for 8 million vulnerable students to reduce dropout rates.
Jamuna River Sustainable Management Project 1 ($102 million): Targeting riverbank protection and navigability in the Jamuna River, this project aims to safeguard approximately 2,500 hectares of land from erosion and flooding. It will improve navigation channels and revive inland water transport and trade.
Urban Health, Nutrition, and Population Project ($200 million): Focused on primary healthcare improvement, this project targets common illnesses, including mosquito-borne diseases like dengue. It also supports mosquito control, medical waste management, and behavior change communication.
Gas Sector Efficiency Improvement and Carbon Abatement Project ($300 million): Aiming to enhance gas distribution efficiency and reduce methane emissions, this project will install over 1.2 million prepaid gas meters in Dhaka and Rajshahi Division. It seeks to optimize natural gas end-use, mitigate greenhouse gas emissions, and lower gas bills for households and industrial users.
These projects mark a continued partnership between the World Bank and Bangladesh, with the International Development Association (IDA) playing a pivotal role. Currently, Bangladesh boasts the largest ongoing IDA program, totaling $16.46 billion in 57 projects. The World Bank has been a longstanding supporter of Bangladesh, committing over $40 billion in grants, interest-free, and concessional credits since the country’s independence.
