Bangladesh seeks $2bn from World Bank, ADB to stabilise economy

Bangladesh also asked the IMF for $4.5 billion fund assistance

The government has requested $2 billion from the World Bank and the Asian Development Bank in budget aid to prop up the economy on the edge due to the Ukraine-Russia war following the pandemic.

Bangladesh asked for fund assistance of $1 billion from the ADB and $750 million from the World Bank and another $250 million from its fund for the countries affected by climate change, according to Economic Relations Division officials.

The government also applied to borrow $4.5 billion from the International Monetary Fund or IMF.

Md Abdul Baki, additional secretary at the ERD’s World Bank Wing, said: “We’ve forwarded a plan to the World Bank seeking $250 million assistance in each of the next three fiscal years.”

Bangladesh is likely to finalise a structure for the fund assistance in a meeting with the World Bank slated for October.

In the 2020-21 financial year, the government reached an agreement for $500 million to combat the impact of the COVID-19 pandemic, but the World Bank has released $250 million so far. The rest of the fund will arrive this financial year.

Pear Mohammad, additional secretary at the ERD’s ADB Wing, said the $1 billion assistance from Bangladesh’s Asian development partner is to balance out the potential impact of the global food price hike on the economy.

He added that Bangladesh applied for the fund in April. “The ADB has not said anything conclusive so far. But we're hoping that they will soon let us know.”

The government will table a $500 million or a $250 million per fiscal year plan.

Before this, the ADB agreed to deliver $940 million in funds to combat the pandemic.

Pear said the lending agency is yet to release another $250 million as part of the agreement, which will arrive in the first half of this financial year.