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Bangladesh - Bank & Finance - April 22, 2024

ERD in search of foreign aid

Staff Correspondent: Government takes up projects under Annual Development Program (ADP) every fiscal year. There is no shortage of efforts to implement foreign aided projects in addition to own financing. That is why foreign aided projects are given priority in accepting projects in ADP every financial year. In line with this, the Economic Relations Department (ERD) recently held a meeting of the Foreign Aid Inquiry Committee. ERD secretary Shahriar Quader Siddiquipresided over the meeting.
According to reliable sources, among the projects that were presented in the recent meeting, two project proposals were rejected. Not only that, it is clarified that it is not possible to process financing activities in favor of the respective projects. And in that case, one of the projects is the Department of Primary Education of the Ministry of Primary and Mass Education. Name of the proposed project, Pre-Primary and Primary Education Improvement Project in Cox’s Bazar and Bandarban District. Regarding why it was cancelled, a responsible official of the Economic Relations Department said that the project is related to forcibly displaced Myanmar citizens temporarily staying in Cox’s Bazar and Bandarban districts. So, there is no opportunity to discuss this project.
It is known that another project of the same ministry and department is Government School Feeding Program Phase-1. Asian Development Bank, World Food Program and IDB for this project. It was discussed in the meeting to seek foreign assistance from development cooperation agencies. However, on the basis of the discussion, everyone agreed that the receipt of foreign aid should be confirmed before presenting at the Ecnec meeting. However, it was decided in the meeting that proposals for foreign aid should be sent to various departments of the Economic Relations Department.
It is known that in the Dhaka Mass Rapid Transit Development Project discussion, it was mentioned in the meeting that foreign funding from China should be sought for the project. The project is under the Road Transport and Highways Department. The next project discussed is Tongi-Bhairobazar-Akhaura MG Double Truck Rail Line. This project of the Ministry of Railways is said to be in the pipeline of ADB. After this it was decided to explore foreign financing. The same ministry has another project. And that is, JhalkathiChuetKaptai Dual Gauge Railway Line. The feasibility of constructing a 45 km railway line at a cost of around 8 thousand crore rupees was discussed. However, in the discussion, the amount of population living in the project area and the number of industrial factories were asked. At the same time, it was asked whether the current transport system is sufficient for commuting. Apart from this, if this project is accepted, it is asked whether the project will be financially sustainable after its implementation and management expenses. A fresh survey report has been asked to be submitted to find out.
In the meeting, the 120 MW solar power plant project of Raipura of the power department was discussed. Discussions revealed that 368 acres of land would be required for implementation of the project. After completing the land acquisition process, a decision has been taken to explore foreign financing.
It is reported that Japan, America and JICA have expressed interest in funding a project called Air Pollution Monitoring of the Ministry of Environment, Forests and Climate Change. Apart from this, it was agreed to explore foreign funding after completion of survey activities for two projects of the Ministry of Fisheries and Livestock.
The meeting is said to have agreed to seek foreign funding from IDA for a project by IMED. However, it is advisable to follow certain rules in raising foreign financing. One of these is that there should be no ambiguities in finding development partners in terms of project financing. Sources of the meeting said that this issue has been asked to be taken seriously.
According to ERD data, loan commitments to development partners increased in the first eight months of the current fiscal year 2023-24. Development partners have committed $7.2 billion in loans during this period. Which was $178 million in the same period of the last financial year. In the current financial year, the target is to realize commitments of $9.92 billion from various development aid agencies. ADB has promised the most. A commitment of $2.62 billion has been received from the organization. Apart from this, $202 million from Japan and $141 million from the World Bank were received.
On the other hand, ADB has given the most money in the current financial year. The company has written off $1.3 billion. Japan has released $104 million. After that, the World Bank released $877.8 million. Apart from this, Russia has discounted $80.5 million and China $36.17 million.

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