DHAKA June 30, 2015: — The Government of Bangladesh today signed two financing agreements with the International Development Association (IDA) to build a strong financial sector and long term disaster resilience in the urban areas, namely Dhaka and Sylhet. The projects are: $300 million for the Financial Sector Support project and $173 million for the Urban Resilience project. IDA is the World Bank’s concessional arm that helps the world’s poorest countries.
The Financial Sector Support project will support developing long-term financing market in Bangladesh. The project will enable the participating financial institutions to provide long-term financing to manufacturing and export intensive firms. The financing institutions will lend at commercially determined rates and also offer Shariah-compliant financial products. The project will also strengthen Bangladesh Bank’s supervisory and oversight functions and support building the financial infrastructure, including the payments system, credit reporting systems, and other areas.
“The two projects signed today will contribute to building a prosperous and resilient Bangladesh. The Financial Sector Support Project will help make doing business in Bangladesh easier by providing eligible private sector firms with access to long-term financing. This will help to create more jobs,” said Christine Kimes, Acting Country Head, World Bank Bangladesh. “The World Bank is currently investing about US$1.2 billion to build resilience to coastal flooding and cyclones. Promoting urban resilience is a greater challenge, as rapid urbanization and population density are making Bangladeshi cities more vulnerable to disasters. The Urban Resilience Project will help improve emergency management and building construction practices.”
The Urban Resilience Project will address seismic risk and reduce structural vulnerability of future building constructions in Dhaka and Sylhet. The project will strengthen the capacity of Government agencies to respond to emergency events by equipping them with response resources, including emergency operations centers, inter-operable communication systems, and search and rescue equipment. The project will also contribute to improved building construction practices in Dhaka and Sylhet.
"Bangladesh needs a transparent, inclusive, efficient and effective financial sector to realize it's dream of becoming a middle income country,” said Mohammad Mejbahuddin, Senior Secretary, Economic Relations Division, Government of Bangladesh. “Enhancing resilience to disasters like earthquakes in the major urban centers is necessary not only to save human lives but also to undergird the development gains of the past years"
The agreement was signed by Mohammad Mejbahuddin and Christine Kimes on behalf of the Government of Bangladesh and the World Bank, respectively, at the Economic Relations Division.
Credits from IDA have a 38 year term, including a 6 year grace period, and a service charge of 0.75 percent.
For more information on the World Bank in Bangladesh, please visit: https://www.worldbank.org/en/country/bangladesh
Visit us on Facebook: http://www.facebook.com/worldbankbangladesh