Bangladesh is set to enter negotiations with the World Bank next week for a substantial $500 million budget-support credit to boost economic recovery, officials confirmed Friday.
This funding, aimed at green growth, marks the first major World Bank-backed initiative for the interim government led by Professor Muhammad Yunus, who took charge post-uprising.
“We will sit for negotiations with the WB later next week. We are hopeful of getting a good result from the next meeting,” said a senior official from the Economic Relations Division (ERD) on Thursday.
The financing is expected to be finalized and disbursed by December, contributing to Bangladesh’s transition toward green and sustainable economic growth.
The proposed loan would be the second tranche of the Green and Climate-Resilient Development (GCRD) credit, following an initial $500 million provided last April under the first tranche of the GCRD Development Policy Credit (DPC) program.
The World Bank has expressed enthusiasm for supporting this interim government with increased backing for policy and structural reforms aligned with sustainable development goals.
An official from the Ministry of Finance (MoF) shared that, initially, the Bank assured $250 million under the second tranche but later responded positively to Bangladesh’s request for doubling the amount to $500 million during the recent IMF-WB Annual Meeting in Washington.
The funds are intended to support critical foreign exchange reserves, which have dropped to approximately $20 billion from $47 billion just two years ago.
“We hope that all the terms and conditions will be settled in the next meeting later this week. And then the $500 million loan will be received by next month,” the MoF official added, expressing gratitude for the Bank’s supportive response.
The 1st GCRD DPC tranche required Bangladesh to meet specific targets, such as ensuring 7% of public-procurement bids from women-owned businesses, reducing household reliance on solid fuels, and cutting fuel subsidies for diesel, heavy fuel oil and octane by 67%.
Additional measures included achieving 1,000 GWh of cumulative energy savings, reducing liquid fuel usage for power generation, and introducing water-tariff models in 30 municipalities.
