ADB lending may overrun target amid growing needs

The Asian Development Bank (ADB) lending for the term of 2016-2018 for Bangladesh may go beyond the indicative US$ 2.68 billion (268 crore) mark for increased fund needs following 'over-programming'.
Such forecast is contained in the lender's latest draft aide memoire setting forth the framework on bankrolling the country's development agenda.
During the period, officials said, it will keep such over-programmed projects in the 'standby' category in order of priority.  
However, the funding agency will process the projects and programmes by their readiness regardless of being listed in 'firm' or 'standby' categories.
In the fiscal year (FY) 2013-14 the ADB had provided nearly $470 million and in the FY 2012-13 $616 million in credit to Bangladesh.
A senior official at the ministry of finance (MoF) said ADB is the second-largest development partner for Bangladesh with its increasing funding support against the rising needs of the country.
"With increased number of development projects taken, our demand for overall loans has been increasing over the years. As a result, projects and programmes seeking funds from the ADB have also increased," he told the FE.
The ADB in the aide memoire says its 2016-2018 funding programme will respond to the current development priorities of the government, including sustaining strong and inclusive economic growth and human development.
"The programme will support continued government efforts on industrial development for diversification of economy and rural development for managing urbanisation. Infrastructure development, skills development, environment and climate resilience, private-sector development and mobilisation, and regional cooperation and integration are among priorities," it is stated.
The memo puts thrust on supply, access, efficiency, and regional connectivity in the field of energy and power. For transport, regional connectivity will get focus alongside capacity improvement and network development.
It also says quality education as well as access to education will get priority during the period and skill development for meeting business needs will also be given thrust.
In case of water supply and urban services, their access, environment, primary healthcare and governance will get importance.
Capital-market development, access to finance, and capacity-development support will also get priority in the ADB programme for next three years, the memo mentioned.
Besides, climate-resilient infrastructure, water management, productivity improvement, and income growth will also get importance.
Sources said the ADB country programming mission was holding meetings with government officials, development partners, private sector, and civil society during its ongoing June 7-22 task, to decide about the three-year lending programme.
Discussions centred on infrastructure development for securing energy supply and distribution, potential for gas import from India and Myanmar, investment needs for power generation, transmission, and distribution to achieve uniform access to power by 2018, and efficiency enhancement through smart grid.
During the meetings government officials underscored the importance of ADB's support for coal-based power generation alongside discussing regional power sharing, including possible multiple power sharing with neighbouring countries.
On the transportation front, priority is being given to rail-network development for the Dhaka-Chittagong-Cox's Bazar corridor, with rolling stock upgrading and strengthening, regional road-corridor network-capacity enhancement, and urban transport augmentation in Dhaka.
The Asian bank says during the programme period, the projects in agriculture and natural resources sector will collectively support rural income generation and enhancement through water management, climate-resilient rural infrastructure, and higher productivity and value-added crops.
Officials said during discussion with the government officials, the ADB mission requested continued support from the government for mobilising co-financing and for early preparation and approval of project documents in support of early project processing.
In March this year the ADB had reviewed its $5.26 billion-funded 58 development projects as many of those were facing several implementation hurdles and bottlenecks in different stages.
The lender had marked the projects as 'red', 'yellow' and 'green' on the basis of their implementation status. The projects in the red category are in the worst position in terms of implementation while the yellow category has some moderate problems. The green-category projects are on track of proper execution.
As one of the leading development partners, ADB's cumulative lending to Bangladesh reached nearly $15 billion until the FY 2013-14.
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