DHAKA, January 17, 2012 — The Government of Bangladesh today signed a US$290 million financing agreement with the World Bank for the Second Local Governance Support Project. The project will continue to support Government of Bangladesh’s decentralization efforts through provision of direct block grants to Union Parishads for financing local priorities. With its nation-wide coverage to all 4,504 Union Parishads, LGSP II would benefit 86% of the country’s population or nearly 130 million people.
The Second LGSP would provide increased discretionary resources and introduce performance based grants in addition to expanding the amounts and coverage of direct block grants. The project will channel 30% of funds to schemes prioritized by the women and would support formation of Women’s Forum at the Upazila level.
“Like its predecessor, the project will continue ensuring better service delivery at the local level,” said Ellen Goldstein, Country Director, World Bank Bangladesh. “It will help Union Parishads in becoming more accountable and responsive along with strengthening the capacity, fiduciary oversight and transparency of local governments.”
The project is built upon the success of the Local Governance Support Project which was the first national program to strengthen Union Parishads, the lowest tire of local governments. For the first time, the Union Parishads received block grants directly with full discretion through a participatory process, after undergoing rigorous audit process.
The project will support provision of ward-level meetings and open budget presentations to create greater transparency at Union Parishad level. The project will also support creation of ICT-based Help Line for citizens to access Union Parishad related all information from their mobile phone.
“LGSP-II is consistent with and supportive of Government’s Sixth Five Year Plan,” said Mr. Iqbal Mahmood, Senior Secretary, Economic Relations Division, Government of Bangladesh. “LGSP-II will further improve the quality of participation of the citizens in the local level development.”
The credit from the International Development Association (IDA), the World Bank’s concessionary arm, has 40 years to maturity with a 10-year grace period; it carries a service charge of 0.75 percent.