Dhaka seeks $6b from WB, ADB, Jica, IMF
Due to a dollar shortage, the government is struggling to pay import bills for essential products such as electricity, fuel, and fertilisers, as well as outstanding bills for various government agencies
Bangladesh has officially requested $6 billion in budget support from four international lenders to settle the government's outstanding import bills, stabilise forex reserves, and rejuvenate the economy.
Finance ministry officials anticipate securing the loans by December.
"We have requested $1 billion each from the World Bank, Asian Development Bank (ADB), and Japan International Cooperation Agency (Jica), along with an additional $3 billion from the International Monetary Fund (IMF)," Finance Secretary Md Khairuzzaman Mozumder told TBS on Thrusday.
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"Official letters have already been sent to these organisations, and formal discussions will begin soon," he added.
Finance division officials told TBS that the loan proposals have been officially submitted following separate verbal negotiations with each lender. Formal negotiations with these organisations are expected to start soon.
Due to a dollar shortage, the government is struggling to pay import bills for essential products such as electricity, fuel, and fertilisers, as well as outstanding bills for various government agencies.
To address these issues, the government plans to use the expected $2 billion loan from the World Bank and ADB to cover overdue payments for electricity, gas, and fuel oil imports. The previous government, led by Sheikh Hasina, left an outstanding bill of $2.2 billion for these imports.
"Official letters have already been sent to these organisations, and formal discussions will begin soon."
Md Khairuzzaman Mozumder, Secretary, Finance Division
The $1 billion loan from the World Bank will be discussed during WB Vice President Martin Raiser's upcoming visit to Dhaka this month.
Finance officials expect that conditions for this budget support may include the withdrawal of electricity and gas subsidies and the prompt finalisation of a new power sector master plan.
Bangladesh has also requested a $3 billion loan from the IMF, in addition to the $4.7 billion already agreed upon.
During a recent virtual meeting with Finance Adviser Dr Salehuddin Ahmed, the IMF verbally agreed to this loan.
After the meeting, the finance adviser told reporters that the IMF's managing director will discuss this new loan proposal during the IMF's annual general meeting.
Bangladesh signed a $4.7 billion loan agreement with the IMF in January 2023 and since then has received $2.3 billion in three instalments under this agreement.
With Pakistan recently securing a $7 billion bailout from the IMF, Bangladesh is hopeful of obtaining an additional $3 billion from the agency.
