The World Bank has approved a US$900 million loan to Bangladesh for two major projects in the country’s financial sector and urban management, aimed at facilitating its progress towards upper middle-income status.

“These new financing operations will help Bangladesh sustain growth and strengthen resilience to climate change and other shocks in two critical areas—the financial sector and urban management,” said Abdoulaye Seck, World Bank’s country director for Bangladesh and Bhutan.
“Decisive reforms will help Bangladesh achieve its vision of upper middle-income status,” he added.
$500m for fiscal and financial resilience

The $500 million Second Recovery and Resilience Development Policy Credit focuses on transitioning from trade taxes to consumption and income taxes to enhance competitiveness and prepare for Bangladesh’s graduation from Least Developed Country (LDC) status.
It also aims to institutionalise the public procurement authority, streamlining electronic government procurement processes, and reducing the lead time from 70 to 55 days.
Key measures include bolstering banking sector oversight, improving management of National Savings Certificates, enhancing the efficiency of social protection programmes, and increasing climate adaptation and mitigation investments.

“A well-functioning financial sector is critical for Bangladesh to increase investment and improve access to finance for those left out of formal banking systems,” said Bernard Haven, World Bank’s senior economist and task team leader for the programme.
$400m for climate-resilient urban development
The $400 million Resilient Urban and Territorial Development Project targets urban infrastructure and management in seven city clusters along a 950 km economic corridor from Cox’s Bazar to Panchagarh.
With urbanisation expected to drive 60% of the population to cities by 2050, this project aims to alleviate congestion in Dhaka by fostering growth in secondary cities.

The project will support climate-resilient and gender-responsive infrastructure investments, improve connectivity, enhance food supply chains, and create new economic opportunities. Town-level coordinating committees with significant female representation will oversee these initiatives.

“This will be the first in a series of projects helping Bangladesh build resilience to climate change and create new opportunities and jobs in secondary cities through spatially targeted investments,” said KwabenaAmankwah-Ayeh, World Bank’s senior urban development specialist.
The World Bank has been a key development partner for Bangladesh since its independence, committing around $41 billion in grants and interest-free credits. These new projects reaffirm the World Bank’s dedication to supporting Bangladesh’s journey towards sustainable and resilient growth.