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The Financial Express

Dhaka to seek $5b WB soft loan in next 3 years

| Updated: October 15, 2020 19:46:56


Dhaka to seek $5b WB soft loan in next 3 years

Bangladesh would seek funds worth US$5.0 billion from the World Bank's (WB's) IDA-19 package for the next three years to bankroll its socio-economic development activities, officials said on Tuesday.

In addition, the government would also request the Bank to confirm some $500 million budgetary support for the current fiscal year (FY), 2020-21, to tackle the Covid-19 pandemic impact on the economy, they also said.

It will also approach the multilateral lender for assistance with regards to vaccine procurement, they added.

All the requests will be made at the WB-IMF (International Monetary Fund) Annual Meeting, to be held virtually on October 16-18.

Finance Minister A H M Mustafa Kamal is expected to have a virtual meeting with the WB Vice President for the South Asia Region on the sideline of the annual meet.

An additional secretary at the Economic Relations Division (ERD) told the FE that the finance minister would seek $4.5-$5.0 billion funds from the WB, as Bangladesh needs huge investment to develop its infrastructure and cut poverty.

Besides, the minister would also seek $250 million as fresh budgetary support along with $250 million pending Development Policy Credit (DPC)-III.

"Such budgetary support has become essential because of the shortfall in the government's revenue receipts," he told the FE.

Both formal and informal sectors of the economy are badly hit by the Covid-19 pandemic.

The government has so far announced some Tk 1.03-trillion stimulus package, which is 3.7 per cent of the total Gross Domestic Product (GDP), to fight the coronavirus pandemic and protect people amid the crisis.

Another official at the ERD said Bangladesh had received $250 million DPC-II from the WB in June.

After one and a half years, the government obtained the second installment of the WB's total $750-million DPC amid severe impact of the deadly coronavirus pandemic on the national economy.

The WB in March last had announced $12 billion initial package of assistance for the Covid-hit countries. Of which, $6.0 billion was set to be disbursed from its soft window - the International Development Association (IDA).

Besides, the lender has formed $82 billion fund under the IDA-19 package for the next three years between FY 2021 and FY 2023 for financing its member countries.

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