New ADB dev financing recipe for Bangladesh

A new Asian Development Bank (ADB) recipe holds out over US$2.5 billion as project-financing assistance and $4.5 billion as standby funds for Bangladesh in the next calendar year, official sources said.

The multilateral development financier has "almost finalised" the financing plan in its Country Programming Mission (CPM) 2026, they said Friday.

It is likely to provide more than US$2.5 billion for funding at least 10 development projects next year, Economic Relations Division (ERD) officials said.

Another sum of $4.5 billion will be kept as 'standby fund' as guardrails against any emergency or priority for Bangladesh beyond the 10 projects, said the officials.

"The ADB CPM completed its mission last week. It sat for a wrap-up meeting with the ERD. It has assured Bangladesh of providing at least $2.5 billion worth of funds for several development projects in 2026," a senior ERD official told The Financial Express.

The Manila-based lender has prioritised five key areas-- climate-resilient development, energy efficiency, public-private partnerships (PPPs), social protection, and catalyzing structural reforms--to boost the country's economic development and private-sector growth.

Its Country Programming Mission is an annual report that details planned lending and grants for Bangladesh over a year or multi-year period, such as the 2023-2025 lending pipeline.

Under the current CPMs, the ADB has confirmed to Bangladesh nearly $9.4 billion worth of funds between 2023-2025 period to support development priorities like infrastructure, climate resilience, and private-sector growth.

The ERD official says since Bangladesh would graduate to a developing nation from its LDC status in 2026, the lender emphasizes transition support for the country.

"The ADB would help Bangladesh in weathering the impact of the LDC graduation in its next year's country portfolio," he added.

Its funding is meant for facilitating Bangladesh in regional integration, export diversification, boosting productivity through skilled manpower development as well as in infrastructure-development areas.

According to the proposed funding plans for 10 projects, the Asian bank is likely to lend $300 million for the second phase of the ongoing Dhaka-Sylhet 4-lane-road- development project under SASEC initiative, $115.8 million for Narayanganj Green and Resilient Urban Development Project, and $200 million for the Sustainable Energy Development and Empowering Communities in Chittagong Hill Tracts Project.

A total of $4.5 billion is kept aside for some projects wherefrom the construction of MRT-5 (southern) line is likely to get $300 million in the first phase and the universal pension scheme $100 million in 2026.

Standby fund means the funding against those projects which are not on the priority list in that particular year or there is possibility of entering into the inventory in any exigency.

An ADB official told The Financial Express that the bank's proposed 2026 portfolio for Bangladesh is an interim arrangement as the country does not have any mid-to long-term development plan like the 5-year development plan at this moment.

"So, our CPM has prepared an interim funding arrangement for the year 2026 for Bangladesh's different projects. Our Country Partnership Strategy (CPS) is under process for the preparation in the near future," said the official.

The ADB usually provides financial support for Bangladesh under its CPS. The current CPS (2021-2025) is going to end in 2025.

The lender, the second-largest multilateral development partner for Bangladesh, provided $2.52 billion in the last FY2024-25 and made commitment for $2.0 billion in assistance, ERD data showed.