Bangladesh signs $300m credit deal with World Bank for resilience to COVID, future shocks

The deal aims to help Bangladesh make urban areas resilient to COVID and future crises

The Bangladesh government has signed a $300 million financing agreement with the World Bank to strengthen the country’s local urban institutions to respond to and recover from the COVID-19 pandemic.

The project will benefit 39.9 million urban residents in all eight divisions and also help cities and towns prepare for future shocks, including climate change, disasters, and disease outbreaks, the global lender said in a statement on Sunday.

In addition, 329 municipalities and 10 city corporations will receive funds bi-annually from the project to improve critical urban services and infrastructures to mitigate and respond to climate change impacts, disasters, and future disease outbreaks.

“Bangladesh is rapidly urbanising. With around 36 percent of the population living in urban areas the city corporations and the municipalities can play a critical role in helping the urban poor recover from the pandemic as well as prepare to handle future shocks” said Mercy Tembon, World Bank country director for Bangladesh and Bhutan. “This project will help local government institutions take the right measures to move toward climate-smart urbanisation and prepare for resilience in future shocks.”

The project will carry out labour-intensive public works that on one hand will ensure water supply and sanitation, drainage, and other critical services benefitting the low-income areas, slums, and areas exposed to high disease outbreak and disaster risks and on other hand create jobs for the poor urban people, according to the statement. It will create 1.5 million days of short-term work as well as jobs for 10,000 women under the public works scheme.

All infrastructure will incorporate energy efficiency measures, including solar panels and cool roof measures in municipal buildings and services. The project will install hand-washing stations and toilets, including separate facilities for women and improve sanitation in public spaces such as markets, burial grounds, and offices.

It will also help people with disabilities access municipality-owned health clinics and conduct awareness programmes on vaccines and other COVID-19 protocols, as well as outreach on gender-based violence and climate risks.

“With quick and proactive measures, the Bangladesh government will be able to address the impact of the COVID 19 pandemic,” said Relations Secretary Sharifa Khan. “The project will further support to ensure that the urbans areas remain prepared for any future shocks while benefiting the urban poor through job creation, better services, and infrastructure.”

The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing. It has a 30-year term, including a five-year grace period.

Bangladesh currently has the largest ongoing IDA programme totaling $14.7 billion.