WB to redirect funds from sluggish projects for budget support

The World Bank has decided to free up funds from three ongoing but slow-moving projects and relaxed conditions to allow Bangladesh to secure $250 million in budget support as part of its efforts to help the country stave off financial ruins.

Bangladesh was supposed to get the funds in budgetary support in September this year, but now the Washington-based multilateral lender has brought forward the date to make the funds available by May.

Some $160 million would be re-routed from the three projects, said an official of the Economic Relations Division.  

The WB and the government would sit for negotiation on May 14 and the funds may be available within a couple of days of the meeting, he added.

Bangladesh desperately needs the funds as it has unveiled 18 stimulus packages amounting to Tk 95,619 crore to pull various sectors of the economy out of the coronavirus-induced slump and protect the poor and newly unemployed.  

Another $100 million would come from the WB's IDA-19, the current round of the International Development Association, one of the largest sources of funding for fighting extreme poverty in the world's poorest countries.

To make the budget support available, the WB has gone one step further: it has agreed to relax conditions related to the reforms that Bangladesh had to be put in place before availing the funds.

The reforms relate to setting up childcare centre at the export processing zones and amending the Company Act.

The Washington-based multilateral lender has already allocated $100 million to Bangladesh for health services.