The Asian Development Bank (ADB) has pledged to source Bangladesh with approximately $9.4 billion loan in the upcoming three years to recover the country from the COVID-19 hit and global uncertainty impacts. On 24 July, the Manila-based bank informed the Economic Relations Division (ERD) that Bangladesh will receive more than $3 billion annually under the Bangladesh lending pipeline from 2023-2025.
The ADB offers two different types of loans: soft loans from regular capital resources are issued at a fixed 2% rate, while regular loans from regular capital sources have interest rates based on the secured overnight financing rate plus a contractual margin of 0.5%.
According to ERD & ADB officials, a total of 44 projects are to be financed by the ADB. A list of confirmed projects was compiled after consultation with various government agencies.
According to the Bangladesh Lending Pipeline 2023-2025, “ the highest amount of lending will go to the transportation sector worth $2.9 billion, followed by the education and health sectors $2.35 billion, $1.39 billion for water and urban areas, $1.3 billion for finance, $1.07 billion for energy, and $441 million for agriculture.”
Over the next three years, the ADB will fund a few projects related to roads and railways. The Akhaura-Laksam Double Track Project will get $300 million in lending in 2023. Dhaka-Northwest Corridor Road Project will get $700 million in two consecutive years. A $100 million investment will be made in the development of Dhirasram Inland Container Depot in Gazipur in 2023.
The education and health sector will get $500 million in support for the healthcare improvement projects. In order to upgrade the regulatory system and produce vaccines, a global lender will contribute $300 million.
Additionally, the ADB has committed $250 million for the Second Strengthening Social Resilience Program. Moreover, under the sustainable economic recovery program, the ADB will provide Bangladesh $250 million in budget support in 2023. Along with supporting the growth of secondary education for the next generation, it will lend $600 million for skill development over the course of two years.
The $500 million budget funding for the climate change strengthening program will be distributed in two installments in 2023 and 2025. Additionally, Bangladesh will get $250 million from the international lender in 2025 as part of the “Strengthening Economic Structure for LDC Graduation” initiative.
The Bangladesh Country Programming Mission (CPM) report-2022 states that the ADB would assist the country’s critical infrastructures’ ongoing improvement. The SASEC Integrated Trade Facility Project, the Dhaka Mass Rapid Transit Development Project (Line 5 Southern Route), and a few other projects will also receive funds through the loan pipeline.