The Asian Development Bank (ADB) will provide Bangladesh $500 million budget assistance to support the country's efforts to mitigate the socio-economic impacts of Covid-19 crisis.
Economic Relations Division Secretary Fatima Yasminand ADB Country Director Manmohan Parkash signed the loan agreements remotely on behalf of Bangladesh and ADB, respectively, yesterday.
The Asian Infrastructure Investment Bank is also planning to provide $250 million in cofinancing with ADB to support the government's programmes. And the total assistance package is expected to benefit over 15 million poor and vulnerable people in Bangladesh, reads a press release.
Manmohan Parkash said, "I am very pleased to sign agreements for $500 million in budgetary support for Bangladesh as the country prepares for quick socio-economic recovery while mitigating the diverse impacts of Covid-19 pandemic."
"This assistance is all about lives and livelihoods, and it was processed very quickly in around one month. We are happy that this is being delivered when the country needs it the most.
"I am confident Bangladesh will return to its high economic growth path soon by successfully implementing its robust economic and fiscal measures to protect the poor and vulnerable including women, and cushion trade and businesses."
The package will provide extended salary support to around 1.5 million workers, mostly women, in export-oriented industries. Also, doctors, nurses, and medical workers fighting Covid-19 in government-run hospitals will receive a special honorarium.
The programme will expand coverage of the government's social protection programmes for old-age people and vulnerable women to include all eligible senior citizens and women in the 100 poorest local government units in the country.
At least 2 million poor families across the country will get around $23 each, while about 1 million poor and vulnerable families will receive food support of 20 kilograms per month during the crisis.
Affected industries and sectors, and micro, small, and medium-sized enterprises are also eligible for loans with subsidised interest.
Of the $500 million loans, $250 million comes from concessional ordinary capital resources (OCR) with a 2 percent interest charge per year during the grace period and thereafter, for a term of 25 years, including a grace period of five years.
Another $250 million comes from the regular OCR fund with interest to be determined in accordance with ADB's London interbank offered rate-based lending facility for a term of 15 years, including a grace period of three years.