WB okays $250m budget aid

The World Bank (WB) on Monday confirmed US$250 million, the first tranche of its assured budget support worth $500 million for Bangladesh, to be spent for Covid recovery programmes.
Economic Relations Division (ERD) Secretary Fatima Yasmin and Acting Country Director of WB Dhaka Office Mohammad Anis signed the loan agreement in Dhaka on Monday.
Under the title "Bangladesh - First Recovery and Resilience Development Policy Credit (DPC 1)", the loan would assist Bangladesh in its efforts to implement budget stimulus for the subsequent recovery of Covid-19 as well as to enhance resilience to future shocks.
The $250-million DPC would be utilised to provide stimulus incentives to the affected industries, agriculture sector and export-oriented industries, and to ensure food security.
Bangladesh government announced a large stimulus package for tackling adverse effects of the Covid-19 pandemic.
The stimulus incentive has been kept aside to assist the affected industries, agriculture sector and export-oriented industries, to ensure food security, and to promote the government extended social safety-net programmes and employment creation.
The ERD in a statement said the DPC series would provide $500 million in two consecutive fiscal years (FY) - 2021-22 and 2022-23.
An ERD senior official said they are going to get the $250 million fund, to be injected to the national budget directly, within a few days - as the loan deal has been signed.
The $250 million worth of second tranche is expected to be received in the middle of next FY for minimising potential budget gap.
The DPC focuses on two sectors - fiscal and financial, and lives and livelihood for a resilient economy.
The interest rate of the $250-million budget support is 1.25 per cent, and service charge is 0.75 per cent. The maturity period of the loan is 30 years, with a grace period of five years.

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