Bangladesh and the World Bank have signed a $250 million financing agreement to support the country’s reform efforts to sustain post-pandemic growth and build resilience to future shocks, including climate change.
The “Bangladesh First Recovery and Resilience Development Policy Credit” – the first in a series of two credits – will help Bangladesh build a stronger fiscal and financial sector to support growth, the World Bank said in a statement.
The credit comes from the World Bank’s International Development Association (IDA), which provides concessional financing, and has a term of 30 years, including a five-year grace period.
This will help streamline the bank recovery framework with all banks scheduled to update recovery plans annually.
The program supports the legislative framework on payments, which will contribute to a more efficient financial system.
It also supports interest rate adjustments of public savings instruments such as the National Savings Certificate.
The World Bank’s country director for Bangladesh and Bhutan, Mercy Tembon, said Bangladesh had achieved a strong economic recovery from the pandemic.
“This program will further support government policies aimed at making the economy more resilient and competitive as Bangladesh strives to become an upper-middle-income country by 2031.”
The cancellation of 8,451 MW of investment in coal-fired power generation projects will accelerate the country’s transition to decarbonization and a green economy.
The revised National Building Code will help the country reduce greenhouse gas emissions by improving the energy efficiency of buildings.
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The program will support national tariff policy to modernize taxes and foster a globally competitive export industry.
It will help to better leverage digital technologies and allow non-resident businesses to file VAT returns, according to the World Bank.
The increased coverage of the e-government system (e-GP) will improve the efficiency of public procurement.
It will also support the coverage, timeliness and effectiveness of social protection programs to help the government respond quickly to extreme weather events such as floods and cyclones.
By using the government-to-person payment platform for cash transfers, the government can identify new and existing recipients of emergency assistance while collecting payment data disaggregated by sex.