The World Bank (WB) will provide US$473 million in loan to help Bangladesh improve its financial sector and tackle natural disasters in Dhaka and Sylhet cities.
The government signed two separate loan deals with the WB on Tuesday in Dhaka.
The global lender will provide $300 million loan to build a strong financial sector and help the export- oriented industries and another $173 million credit for long-term disaster resilience in Dhaka and Sylhet cities.
Economic Relations Division (ERD) secretary Mohammad Mejbahuddin and WB acting country head in Bangladesh Ms Christine Kimes signed the agreements.
Under a US$350 million Financial Sector Support Project (FSSP), the WB will bankroll $300 million in loans for improving financial market infrastructure, regulatory and oversight capacity of the Bangladesh Bank (BB) and access to long-term financing for export-oriented industries in Bangladesh.
The remaining $50 million funds for the project will be provided by the Bangladesh Bank from its own fund. All the funds will be utilised by the central bank.
An ERD official said under the FSSP project, the BB will provide $292.5 million fund to the private sector export-oriented enterprises as long-term support credit to boost their financial health and safety standard for reducing their credit risk, support industries, to be relocated from one place to another, and upgrade the long-term capital market of the country.
He said it will support long-term financing (three to 10 years maturity) at market rate through the selected commercial banks and non-banking financial institutions to private sector enterprises, particularly exporters.
"The funding will be focused on manufacturing sector firms."
The official said the fund would also be utilised to strengthen the central bank through improving the Credit Information Bureau, the Bangladesh Financial Intelligence Unit, and the Payment and Settlement System, and strengthening the IT governance and management of the BB.
Under the WB's $173 million loan-supported Urban Resilience Project, the government would improve its disaster management capacity of Dhaka and Sylhet metropolises, which are the most vulnerable cities for earthquake.
Four government agencies -- Rajdhani Unnayan Kartipakhha (RAJUK), Dhaka (North) City Corporation (DNCC), Department of Disaster Management, and Planning Commission would implement the WB-financed Tk 13.90 billion project.
Ms Christine Kimes said: "The two projects signed today will contribute to building a prosperous and resilient Bangladesh. The Financial Sector Support Project will help make doing business in Bangladesh easier by providing eligible private sector firms with access to long-term financing. This will help to create more jobs."
The WB said the Urban Resilience Project will address seismic risk and reduce structural vulnerability of future building constructions in Dhaka and Sylhet.
The project will strengthen the capacity of government agencies to respond to emergency events by equipping them with response resources, including emergency operations centres, inter-operable communication systems, and search and rescue equipment.
The project will also contribute to improved building construction practices through certified training programmes and development of on-line permitting systems in Dhaka and Sylhet.
The WB concessional loan will have a 38-year term, including a 6.0 years' grace period, and a service charge of 0.75 per cent.
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