ADB outpaces WB, provides $2.52b in FY'25

The Asian Development Bank (ADB) has emerged as the top development partner for Bangladesh as it disbursed highest US$2.52 billion in foreign assistance in the last fiscal year (FY) 2024-25, officials said on Friday.

The Manila-based lender surpassed Bangladesh's largest multilateral development partners (DPs)-the World Bank, in terms of annual fund release, they said.

According to a new report from the Economic Relations Division (ERD), the World Bank provided $2.01 billion in loans and grants while the Bangladesh's third largest donor Japan gave $1.578 billion in the last fiscal. Since the country's independence, the WB was the largest DPs of Bangladesh until the FY 2023-24 in terms of annual aid disbursements, officials said.

"ADB has emerged as the biggest development partner of Bangladesh in recent years, as its fund disbursement is rising year on year," said a senior ERD official appreciating the lender's support at a time when the country faces acute foreign-exchange inadequacies. "The amount of foreign assistance from ADB is higher than that of the historically largest development partner, the World Bank," he added.

ADB's contribution was a key component of Bangladesh's total foreign aid disbursement, which stood at $8.57 billion in the fiscal year. The overall foreign aid disbursement by all bilateral and multilateral donors, however, fell by 16.63 per cent from $10.28 billion in FY 2023-24, reflecting broader challenges in project implementation and aid inflows.

According to the ERD data, the ADB's medium- to-long-term loans and grants primarily came in the form of loans aimed at supporting critical infrastructure and economic development projects across the country. The bank's top position highlights its enduring commitment to Bangladesh's growth trajectory, ERD officials said.

Following the ADB, other major development partners also provided substantial foreign assistance. The International Development Association (IDA), a part of the World Bank Group, was the second-largest contributor with a disbursement of $2.01 billion, followed by Japan with $1.58 billion in the last FY 2025. Other notable donors included Russia with $670 million, the Asian Infrastructure Investment Bank (AIIB) with $530 million, and China with $410 million.

In the previous FY2024, the ADB, however, provided lesser amount of aid than the World Bank. During the period, the ADB released $2.13 billion in loans and grants while the WB $2.15 billion, ERD data showed.

Since 1972, the WB provided highest amount of external assistance to Bangladesh to reconstitute its infrastructure and cut hunger.

In terms of aid commitment, however, the WB secured the top position in the last FY 2025 as it signed aid deals worth $2.84 billion with the government. On the other hand, the ADB confirmed $2.0 billion in loans and grants, the ERD statistics showed.

The ADB released $938 million in FY 2018, $1.25 billion in FY 2019, $1.70 billion in FY 2020, $1.30 billion in FY 2021, $2.628 billion in FY 2022 and $1.787 billion in FY 2023.

According to an ERD report, the pressure of foreign debt repayment in recent years has posed a rising concern for Bangladesh as its interest and principal payment is rising year on year.

In FY 2025, the government repaid $4.09 billion in foreign loans, a 21 per cent increase from the previous fiscal year. Analysts warn that the mounting repayment burden, coupled with a slower pace of project execution presents a complex fiscal challenge for the government moving forward. During the year, the Annual Development Programme (ADP) implementation rate dropped to a two-decade low.

Despite the overall decline in aid disbursements, the ADB's substantial contribution underscores its vital role in helping Bangladesh achieve its long-term development goals. According to another ERD official, the ADB is currently bankrolling some mega projects in Bangladesh which need large-scale annual funding. It is financing MRT Line-05, Elenga-Hatikamrul-Rangpur highway, and the Dohazari-Ramu-Cox's Bazar railway line projects.

Since independence, the ADB provided $27.09 billion in loans and grants while the WB $32.79 billion until last FY 2025.