Dhaka negotiating with ADB, EIB for $1.24b to buy vaccines

The government has started holding negotiations with two multilateral lenders to borrow nearly US$ 1.24 billion for buying Covid-19 vaccines, officials said.

They said the talks were on to get $ 940 million from the Asian Development Bank (ADB) and 250 million Euros from the European Investment Bank (EIB).

"We have started negotiations on the terms and conditions of the proposed loans from the EIB," an additional secretary of the ministry of finance told the FE.

At the same time, a mission from the Asian Development Bank (ADB) has started working out the ways of providing its loan for the vaccine procurement.

The fund is expected to be confirmed within this month following necessary approval by the ADB board, said an additional secretary at the Economic Relations Division (ERD).

"The ADB team has kicked off its fact-finding mission through a virtual meeting with the ERD on March 29 last. It is also holding discussion with the relevant ministries like health and finance on the proposed support," he said.

"The mission will be completed within this week, following which we'll go for negotiations with the ADB," he added.

Responding to a government call, the ADB had earlier assured Bangladesh of providing fund for procuring vaccines.

According to the proposed vaccine procurement programme, the government will form a $1.35 billion worth of fund for importing the vaccine and developing its necessary logistics.

The ADB will contribute $940 million while the rest $414.58 million will come from other lenders and from the government exchequer, the ERD officials said.

The fund will be used for procuring vaccine from different sources, and for transportation and logistical development works, said the ERD additional secretary, preferring anonymity.

According to the ADB's proposal, it will provide $470 million from the concessional lending arm with 2.0 per cent interest and the remaining $470 million from the hard window, OCR, with LIBOR-based lending term.

"Initially, Bangladesh sought $500 million in assistance from the ADB for the coronavirus mitigation works. Besides, the government also requested the World Bank, Japan, and the AIIB for providing adequate assistance," he said, adding that the ADB in its last meeting assured of providing the $940 million.

The ministry of finance and the health services division earlier estimated that the country would require some $1.5 billion worth of external funds for importing the coronavirus vaccines for inoculating all the people eligible for the anti-virus injection.

Earlier, the World Bank had also assured Bangladesh of offering $500 million in assistance as an additional financing for the ongoing "Covid-19 emergency response and pandemic preparedness project".

Accordingly, the health ministry recently revised the project incorporating the vaccine procurement components under the ongoing project.

In April 2020, the health ministry took up the project with $100 million World Bank lending on an emergency basis to detect, manage, and treat suspected and confirmed Covid-19 cases.

Meanwhile, the government of Bangladesh had also requested its largest bilateral donor Japan to provide $500 million, and another key lender Beijing-based AIIB $300 million for supporting the vaccination programme across the country.

The AIIB has also assured of providing some $100 million worth of loans for the vaccine support project as the co-financer of the World Bank backed ongoing "Covid-19 emergency response and pandemic preparedness project."

Bangladesh launched the vaccination programme on January 27 in Dhaka and subsequently expanded it across the country.

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