The Financial Express

Dhaka eyes extended WB support in two years

| Updated: March 12, 2021 20:28:47

Dhaka eyes extended WB support in two years

Bangladesh may get extended support from the World Bank as it has planned to front-load $82-billion IDA-19 aid package in two years from the current three-year cycle.

In a recent IDA borrowers' representative and deputies' meeting, the lender opted for extending its financial support to member countries aimed at weathering Covid-19 impacts, officials said on Friday.

The Washington-based International Development Association (IDA)-19 package is currently prepared for three years' period where an $82-billion fund is earmarked for its member countries across the world.

"The WB deputies have given the green light to front-load its planned $82-billion IDA-19 aid package earmarked for three years," said Economic Relations Division (ERD) additional secretary Abdul Baki.

"We're expecting higher support from the global lender than it had earmarked for Bangladesh," he added.

"We were expecting $4.2-billion aid under the IDA-19 package in three years. If the front-load is finally approved, Bangladesh is expecting $5.0-billion assistance in two years between FY2021 and FY2022."

Another ERD official said the deputies, who are donors of the WB, in the February meeting agreed to front-load the package within the first two years of the three-year package.

"In the third year (FY2023) of the ongoing IDA-19 package, the WB may start another package or mobilise more funds for disbursement among members," he added.

Since borrower countries demand higher funds to tackle the pandemic and recover from losses, he said, the lender has decided to front-load its $82-billion aid package in first two years.

The IDA's last replenishment round, concluded in December 2019, secured a record $82-billion fund.

The UK, Japan and the USA are the largest IDA contributors, although the US government's pledge has fallen nearly 9.0 per cent in the last replenishment.

Since 2016, the IDA has also raised money by leveraging those paid-in contributions and repayments on global capital markets, which has allowed the fund to achieve record-breaking replenishment in the last two cycles.

According to the ERD, the WB made a commitment to disburse $2.26-billion assistance in FY2020 and $2.99 billion in FY2019 for Bangladesh.

In the existing set-up, Bangladesh was expecting $1.8 billion worth of loan commitment from the Washington-based lender, the ERD official cited.

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