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Easing pandemic impact

Govt, ADB sign $500m loan deal

'It'll benefit 15m poor in country'

FE Report | May 12, 2020 00:00:00

The Asian Development Bank (ADB) and the government of Bangladesh signed a loan agreement involving US$500 million, aiming to help Bangladesh's efforts to mitigate socio-economic impact of the prevailing COVID-19 pandemic.

The Economic Relations Division (ERD) Secretary Fatima Yasmin and the ADB Country Director for Bangladesh Manmohan Parkash remotely signed the loan agreement on behalf of their respective sides, according to a press release of the Manila-based lender.

The loan agreement was signed after the ADB Board of Directors approved the said amount as budgetary support for Bangladesh amid the pandemic on May 7.

"I am very pleased to sign the agreement for providing $500 million in budgetary support to Bangladesh, as the country prepares for quick socio-economic recovery while mitigating diverse impacts of the COVID-19 pandemic," the release mentioned, quoting the ADB country director.

"This assistance is all about lives and livelihoods, and it was processed very quickly in around one month. We are happy that this support is being delivered when the country needs it the most."

"I am confident that Bangladesh will return to its high economic growth path soon by successfully implementing its robust economic and fiscal measures to protect the poor and vulnerable, including women, and cushion trade and businesses," Mr. Parkash was quoted as saying.

The assistance package is expected to benefit over 15 million poor and vulnerable people in Bangladesh, the ADB press release said.

Besides, around 1.5 million workers, mostly women, in export-oriented industries would receive extended salary support, while doctors, nurses, and medical workers fighting COVID-19 in the government-run hospitals will receive special honorarium.

The government's social protection programmes for people of old-age and women in distress will be expanded to cover all eligible senior citizens and women in the 100 poorest local government units in the country, according to the release.

At least 2.0 million poor families across the country will be given about $23 each, while about 1.0 million poor and vulnerable families will receive food support of 20 kilogrammes per month during the pandemic emergency period.

Affected industries and sectors, and micro, small, and medium-sized enterprises will also be eligible for loans with subsidised interest, it mentioned.

The loans are supported by a $1.0 million technical assistance grant to help the government improve its institutional capacity, introduce new tools for service delivery, develop a gender-responsive plan to improve the social safety net, and improve monitoring and evaluation capacity.

Besides, the Asian Infrastructure Investment Bank (AIIB) is planning to provide $250 million in cofinancing with the ADB to support the government's programme, the press release further said.

The assistance is part of the ADB's COVID-19 Active Response and Expenditure Support (CARES) Programme, which is funded through COVID-19 Pandemic Response Option (CPRO) under the donor's Countercyclical Support Facility.

CPRO was launched as part of the ADB's $20-billion expanded assistance for developing its member countries' response to the pandemic, and was announced on April 13, it added.

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