Publish: 21 May 2020, 02:08 pm
Asian Infrastructure Investment Bank (AIIB) has approved a $250 million loan to Bangladesh as the country grapples with the fallout from the novel coronavirus disease, according to a press release of AIIB.
The loan, co-financed with the Asian Development Bank (ADB), is part of a program to provide the Bangladesh government with budget support to mitigate the adverse effects of the pandemic on the country's poor and most vulnerable, particularly those affected by job losses in small and medium enterprises and the informal sector, as well as strengthen social safety nets.
The program also has specific targets to support women in export-oriented industries.
Bangladesh is extremely vulnerable to COVID-19 as it has one of the highest population densities in the world, the press release said.
Nearly 15 percent of households continue to live in poverty, with a high share of households living in informal settlements, and more than 80 percent of the workforce employed in the informal sector, all of which make it difficult and expensive to maintain social distancing measures to contain the spread of the virus.
According to ADB estimates, a serious outbreak would result in job losses ranging from 1.4 to 3.7 million.
"Our support to Bangladesh is part of AIIB's broader proactive efforts to respond to the needs of our vulnerable members to weather the COVID-19 crisis," said AIIB Vice President, Investment Operations, DJ Pandian.
Pandian noted that Bangladesh had in recent years performed exceedingly well with annual growth averaging 7.4 percent over the last five years.
"It is incumbent on the international community to come together to ensure that the country does not fall behind but continues to make strides in its development efforts."
While AIIB does not have a regular instrument for policy-based financing, the bank is extending such financings on an exceptional basis under the Covid-19 Crisis Recovery Facility to support its members on projects co-financed with the World Bank or the Asian Development Bank.
AIIB's Covid-19 Crisis Recovery Facility, created as part of the coordinated international response to counter the Covid-19 crisis, has an initial size of $5-$10 billion to support AIIB members' urgent economic, financial and public health pressures and quick recovery from the crisis.