Shawdesh desk:

Bangladesh is likely to receive $1.45 billion in loans from four development partners to support its Covid-19 recovery and address the dollar crisis.

The loans include $500 million from the World Bank, $400 million from the Asian Infrastructure Investment Bank (AIIB), $250 million from the Asian Development Bank, and $300 million from Japan, according to sources at the Economic Relations Division (ERD).

The lenders will provide the loans as part of their green recovery of the economy programme, and the budget support may be available next month, as the issue of getting the funds is at the final stage, an ERD high official said, requesting anonymity.

Economic analysts believe that the new budget support, following the confirmation of a $4.7 billion loan from the International Monetary Fund (IMF) in January, is good news for the economy as it will help address the dollar crisis caused by the conflict in Ukraine. Bangladesh received the first installment of the IMF loan, $470 million, in February 2023.

The $500 million budget support from the World Bank was finalized at a recent meeting between ERD and the officials of the Washington-based multilateral lender.

An official of ERD’s World Bank wing, who attended the meeting, said, “Imports and exports are getting hampered because of the dollar crisis. The problem is also expanding elsewhere. So, the government’s main target is to increase the supply of dollars at present.”

He informed that they requested $500 million in budget support from the meeting with a request for quick release of the funds. “The World Bank officials have agreed on the release of the funds as early as possible after the discussion. It is expected that the money will be available early next month,” the official added.

ERD officials have informed that the loan deal for $250 million in budget support from the Asian Development Bank is nearly final, and the signing will take place next month.

The financing issue was discussed when the ADB president visited Dhaka to celebrate the 50-year relationship between Bangladesh and ADB. The lender extended $250 million in budget support for corona recovery during the last fiscal year.

Meanwhile, ERD also had an effective discussion with a delegation of the Japanese government that recently visited Dhaka, and the officials are optimistic about getting the $300 million from Japan.

The government is also expecting $400 million in budget support from the Beijing-based multilateral lender early next month.