World Bank to give $130 million in loans to Bangladesh for economic zones

The government has signed a $130 million additional financing agreement with the World Bank for the development of the recently licensed and new economic zones in Bangladesh.

The loan was given to the Private Sector Development Support Project (PSDSP), according to a media statement from the global lender.

Economic Relations Division Additional Secretary Kazi Shofiqul Azam and Acting World Bank Country Director for Bangladesh Rajashree Paralkar signed the agreement at an event on Sunday.

The new credit has a 38-year term, including a six-year grace period, and a service charge of 0.75 percent.

The statement said this loan would be utilised to develop the new economic zones and to attract foreign and domestic investment, while creating more jobs in the manufacturing sector.

In the past two years, the PSDSP has helped with the licensing of 16 economic zones and hi-tech parks and the assessment of 33 new sites for development as economic zones.

The latest funding will help construct off-site infrastructure and works, and zone-specific infrastructures, such as perimeter walls, central effluent treatment plants, water treatment plants, and other facilities, said the statement.

It will also negotiate a Public-Private Partnership for economic zone development.

Rajashree Paralkar said, “Bangladesh needs to create more and better jobs in the manufacturing sector to accelerate growth and poverty reduction.

“The economic zones play a critical role in attracting private investment and creating jobs, as the benefits are many.”

Paralkar added that this financing would directly contribute to the government’s vision of establishing 100 economic zones over the next 15 years.

Kazi Shofiqul Azam said, “Both the sixth and the seventh Five-Year Plans considered establishing new economic zones as a cornerstone to strengthen the manufacturing sector and promote efficient use of skilled labour, land, and other resources.

“The new economic zones and high-tech parks will be important to achieve the government’s poverty alleviation goals.”