interim government has received a verbal approval of $1 billion in budget support from the World Bank, finance ministry officials said. Besides, the Asian Development Bank has also responded positively to the request for one billion dollar assistance.
Finance department officials have now started formalizing proposals to seek budgetary support from the two global lenders to pay outstanding power and energy import bills.
Japan, which has so far largely funded the project through loans, has also responded to the government’s request for budget support. Finance Ministry officials are preparing a wish list to receive $2.7 billion in budget support from the Japan International Cooperation Agency (JICA).
In addition to the $4.7 billion already agreed to by the International Monetary Fund, the government is seeking another $3 billion in budget support from the agency.
Besides, Bangladesh is seeking loans from other lenders including the Asian Infrastructure Investment Bank (AIIB).
According to Finance Department officials, a formal discussion on the verbally agreed $1 billion assistance is scheduled to take place in the first week of September during the World Bank’s South Asian Region Vice President Riser’s visit to Dhaka.
Since assuming office in the second week of August, Finance Adviser Salehuddin Ahmed and other advisers of the new interim cabinet have held meetings with representatives of various bilateral and multilateral development partners to discuss the country’s urgent financing needs.
These representatives have shown a positive response. Top finance ministry officials are hopeful of getting additional foreign aid to meet foreign arrears and boost reserves.
The energy department is under pressure from foreign suppliers over crude oil and gas import bills. India has reduced power exports to Bangladesh several times due to delays.
The Finance Adviser held a Zoom meeting with IMF Mission Chief Chris Papageorgio and Resident Representative Jayendu in Bangladesh on the evening of August 29, Finance Department officials said. There was also a discussion about the possibility of an additional 3 billion dollars loan from the IMF.
Bangladesh signed a 4.7 billion dollar loan agreement with the IMF in January 2023. The company has already released $2.3 billion in three installments under the deal.
Pakistan recently received a seven billion dollar bailout program from the IMF. Therefore, Bangladesh is also hopeful of getting an additional three billion dollars from the organization.
In a recent interview with the BBC, the Governor of Bangladesh Bank expressed interest in taking another three billion dollar loan from the IMF.
The finance adviser, and the governor, plans to discuss this potential new loan with the IMF at the IMF-World Bank board meeting in Washington next October.
