Bangladesh: World Bank provides USD 250 million to strengthen financial sector policies

The World Bank on Friday approved financing of USD 250 million for Bangladesh to help it strengthen policies to sustain growth following the Covid 19 pandemic and enhance resilience to future shocks. The Bangladesh First Recovery and Resilience Development Policy credit is first in a series of two credits to support fiscal and financial sector policies to enhance macroeconomic stability and sustain growth. It supports expanding and modernising social protection programs and energy sector policies to improve efficiency and reduce greenhouse gas emissions. These actions will help the country build resilience against future shocks, including climate change, said the World Bank. World Bank Country Director for Bangladesh and Bhutan Mercy Tembon said that since 2020 the World Bank has provided USD 3 billion to Bangladesh to support emergency response, vaccination and other Covid recovery efforts. He said that this credit will further pave the way for a green, resilient, inclusive recovery and low carbon growth by strengthening the government’s effort in this direction. The programme supports the development of the National Tariff Policy which will help modernise trade taxes enabling foreign firms to submit VAT returns and make payments. The financing will help streamline the bank recovery framework. All scheduled banks will prepare recovery plans, which will be updated annually. This program will help the government rapidly scale up cash transfer programs to respond to future shocks and to expand the use of the government-to-person payment platform for cash-based programs. On the environment front, the financing will allow the government to respond more quickly to climate-related crises, including floods and cyclones, by identifying and targeting new and existing beneficiaries for emergency assistance. It will also help Bangladesh with its transition to a low-carbon economy. The credit is from the World Bank’s International Development Association (IDA), which provides concessional financing over a 30-year term, including a five-year grace period. Bangladesh currently has the largest ongoing IDA program totaling over USD 14.5 billion.