World Bank Gives $300Mn Loan to Bangladesh

The World Bank (WB) has given a loan of 300 million dollars to Bangladesh. The organization has given this loan to deal with the Coronavirus crisis. The loan amount in Bangladeshi currency is 2 thousand 854 crore 80 lakh taka per dollar equal to 95.16 taka.

An agreement was signed with the Bangladesh government and the World Bank on Sunday (August 8). It was signed by Sharifa Khan, Secretary of the Economic Relations Department (ERD) on behalf of Bangladesh and Marcy Tembon, Country Director of Bangladesh and Bhutan, on behalf of the World Bank.

A $300 million loan agreement has been signed under the Local Government Covid-19 Response and Recovery Project. The Local Government Engineering Directorate under the Local Government Department will implement the project. The implementation period of the project is from January 2022 to December 2025.

The loan will be taken in World Bank's Special Drawing Rights (SDR) currency and will be repaid within 30 years with a grace period of five years. However, service charge at the rate of 0.75 percent and interest at the rate of 1.25 percent will have to be paid annually on the loan raised.

Although there is a provision for payment of commitment fee at the maximum annual rate of 0.50 percent on uncollected funds, the World Bank has been waiving the issue of commitment fee for a long time.

The main objective of the project is to enhance the capacity of urban-based local government institutions to cope with the Covid-19 pandemic, expand the reach of health services and ensure essential civic amenities. These include- water supply, waste management, sanitation, drainage etc. Apart from this, IT-based revenue management will be developed with the aim of increasing the vaccine distribution program to the people and increasing the own income of the city corporations and municipalities through the project.