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A financing agreement was signed on Sunday between the Bangladesh government and the International Development Association (IDA) of the World Bank Group for a loan equivalent to US$ 500 million to implement the "Second Bangladesh Green and Climate Resilient DPC Programme."
The main objective of the stated programme is to strengthen fiscal and financial sector policies to sustain growth and enhance resilience to future shocks, including climate change, BSS reported, citing a press release on Sunday.
The Finance Division is the main implementing agency of this programme. Other implementing ministries or divisions include the Local Government Division, Bangladesh Bank, Ministry of Planning, Ministry of Environment, Forest and Climate Change, Ministry of Power, Energy and Mineral Resources, Ministry of Science and Technology, Health Services Division, and the National Board of Revenue.
Md Shahriar Kader Siddiky, Secretary of the Economic Relations Division, and Abdoulaye Seck, Country Director of the World Bank, signed the financing agreement on behalf of their respective sides.
Of the $500 million, $250 million is being taken as a loan from the World Bank’s IDA-Regular loan. This loan is repayable over 30 years with a 5-year grace period. The interest rate is 1.25 percent, the commitment fee is 0.50 percent, and the service charge is 0.25 percent.
However, the World Bank waives the commitment fee every year.
The remaining $250 million is being taken from the IDA-Shorter Maturity Loan (SUW-SML). This loan is repayable over 12 years with a 6-year grace period.
This loan has no interest, service, or other charges. There is only a 0.50 percent commitment fee, which is typically waived by the World Bank.
The World Bank is the largest development partner of Bangladesh. The World Bank has committed more than USD 43.00 billion to Bangladesh since its independence. Currently, the World Bank is financing around $17 billion for 52 ongoing projects that cover economic and social development, institutional, health, infrastructure, power, environment, and other important sectors.