The Asian Infrastructure Investment Bank (AIIB) has emerged as the first budget-support provider to Bangladesh in the current fiscal year as it confirmed US$250 million in fiscal support on Wednesday.
With this support, the Beijing-based lender has also appeared as a key development partner, confirming $1.05 billion in budgetary support to Bangladesh in three years, said Economic Relations Division (ERD) officials.
AIIB Vice President Urjit R Patel and ERD Secretary Sharifa Khan signed a deal in this regard on Wednesday.
The credit will mature in 26.5 years with a grace period of three years.
The AIIB will charge SOFR plus 1.3 per cent interest rate for the budgetary support, a senior ERD official said.
The Bangladesh government is also trying to get budgetary support from the International Monetary Fund (IMF), World Bank, Asian Development Bank, and Japan.
According to the ERD, the budgetary support will mainly be utilised for improving inclusiveness and responsiveness of social development in the country.
The government will use the loan to improve coverage and efficiency of the social protection and financial inclusion of the disadvantaged people, and strengthen lifecycle social and health needs.
Before confirmation of the $250 million budgetary support on Wednesday, the Beijing-based lender provided $800 million budget support in the last three years for combating Covid impact and its recovery.
The AIIB started its journey in 2016 and has so far confirmed a total of 2.75 billion worth of assistance to Bangladesh to facilitate its development and cut poverty.