WT 24 Desk
The World Bank (WB) will provide US$ 473 million to Bangladesh to build a strong financial sector and long term disaster resilience in the urban areas in Dhaka and Sylhet.
To this end, the government today struck two financing agreements with the International Development Association (IDA), WB’s concessional arm that helps the world’s poorest countries. Senior Secretary of Economic Relations Division (ERD) Mohammad Mejbahuddin and Christine Kimes, acting Country Head, World Bank Bangladesh, put pen on the agreement papers at ERD on behalf of their respective sides.
The projects are: $300 million for the Financial Sector Support and $173 million for the Urban Resilience. The Financial Sector Support project will support developing long-term financing market in Bangladesh. It will enable the participating financial institutions to provide long-term financing to manufacture 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 Financial Sector Support Project will help doing business in Bangladesh easier by providing eligible private sector firms with access to long-term financing, and will help create more jobs,” said Christine Kimes.
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,” added Christine.
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 through certified training programs and development of on-line permitting systems in Dhaka and Sylhet. “Bangladesh needs a transparent, inclusive, efficient and effective financial sector to realize its dream of becoming a middle income country,” said Mohammad Mejbahuddin. “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,” he added.
Credits from IDA have a 38-year term, including a 6-year grace period, and a service charge of 0.75 percent.