Monday, 23 May, 2022

World Bank to provide $250m budget support

  • Staff Correspondent
  • 19 April, 2022 12:00 AM
  • Print news

World Bank is providing $250 million loans to Bangladesh  as budget support to help the country recover from the Covid-19 economic shocks.

A loan agreement was signed between the Washington-based multilateral lender and Economic Relations Division (ERD) at a function in Dhaka on Monday.

ERD Secretary Fatima Yasmin and World Bank Acting Country Director Mohammad Anis signed the loan deal on behalf of their respective sides.  

The money will be utilised in the project namely "Bangladesh First Recovery and Resilience Development Policy Credit (DPC1)." 

In response to the adverse effects of Covid-19, the government has provided stimulus incentives to economically affected industries, agriculture sector and export-oriented industries. 

The government said it also needs more money to ensure food security, while it has to extend the social safety net programmes and employment generation initiatives.  

Bangladesh First Recovery and Resilience Development Policy Credit (DPC1) plays a key role in sustaining the post Covid-19 economic recovery and development momentum.

The DPC series will provide $500 million in two consecutive fiscal years - FY2022 and FY2023. 

The main objectives of the DPC1 are to assist Bangladesh in its efforts to implement budget stimulus for the subsequent recovery of Covid-19 and to enhance resilience to future shocks. 

There are two sectoral focuses- fiscal and financial lives and livelihood for a resilient economy.

The interest rate of the loan is 1.25 percent and the service charge rate is 0.75 percent. The loan has to be repaid in 30 years with a grace period of five years.