ADB to lend record $1.33b to Bangladesh this fiscal year

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FHM Humayan Kabir
The Asian Development Bank (ADB) would lend a record US$ 1.33 billion to Bangladesh this year, the highest single year credit by the Manila-based anti-poverty lender, officials said Thursday.
Finance ministry officials said the ADB has already assured lending of $1.02 billion following successful negotiations with the government in the last two months and it also agreed to provide another $315m in energy and Padma bride projects.
Out of the total, the Asia-pacific lender would provide half a billion dollar credit from its three billion dollar "counter-cyclical support facility fund" by December to cushion off the effect of the global meltdown on Bangladesh economy.
It would also give $245 million budgetary support credit to minimise the country's fiscal deficit, which has been projected to hit 5.0 per cent of the gross domestic product (GDP) this financial year 2009-10.
The rest of the assistances would be made for water, tourism, health and small and medium enterprises development, economic relations division (ERD) official said.
ERD secretary M Musharraf Hossain Bhuiyan told the FE that ADB's $1.33 billion loan this fiscal year would be the biggest single year allocation by the Manila-based lender since Bangladesh won independence in 1971.
"It's a very good news for the country, especially at a time when the world is mired in the worst global recession and many bilateral donors are reluctant to provide fresh credit to the developing countries," Bhuiyan said.
"The ADB aid would be crucial for our increased spending on infrastructure, energy and human development. This is very much needed to boost growth," he said.
ERD officials said this year's amount also around half a billion more than the highest aid the Asia Pacific lender committed to the country in 2006-7 fiscal year.
ADB is Bangladesh's second largest multilateral donor, which mainly invests in infrastructure and social sector development aimed at reducing poverty and make the country a middle income economy.
The bank, whose loans have fewer strings attached than the World Bank or the International Monetary Fund, has so far provided $7.14 billion worth of loans and grants to Bangladesh till last financial year 2008-09.
In 2008, the lending agency has approved $10.5 billion of loans, $811.4 million of project grants, and technical assistance amounting to $274.5 million for its 67-member countries in the Asia-Pacific region.