ZCZC
BSS-33
ADB-ASSISTANCE-AGREEMENT
Govt inks $500m deal with ADB to mitigate COVID-19 pandemic
DHAKA, May 11, 2020 (BSS) – The government and the Asian Development Bank
(ADB) today signed $500 million loan agreements to strengthen Bangladesh’s
efforts to mitigate the socio-economic impact of the novel coronavirus
disease (COVID-19) pandemic.
Economic Relations Division (ERD) Secretary Fatima Yasmin and ADB Country
Director Manmohan Parkash remotely signed the loan agreements on behalf of
Bangladesh and ADB respectively, said an ADB press release.
“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,” said
Country Director Manmohan Parkash.
“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,” Parkash added.
The assistance package is expected to benefit over 15 million poor and
vulnerable people in Bangladesh. Around 1.5 million workers, mostly women, in
export-oriented industries will receive extended salary support while
doctors, nurses, and medical workers fighting COVID-19 in government-run
hospitals will receive special honorarium.
The government’s social protection programs for people of old-age and women
in distress will be expanded to cover 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 be given about $23
each, while about 1 million poor and vulnerable families will receive food
support of 20 kilograms per month during the pandemic emergency period.
Affected industries and sectors, and micro, small, and medium-sized
enterprises are also eligible for loans with subsidized interest.
The loans are supported by a $1 million technical assistance grant to help
the government improve its institutional capacity, introduce new tools for
service delivery, develop a gender-responsive plan to improve the social
safety net, and improve monitoring and evaluation capacity.
The Asian Infrastructure Investment Bank (AIIB) is planning to provide $250
million in co-financing with ADB to support the government’s program.
The assistance is part of ADB’s COVID-19 Active Response and Expenditure
Support (CARES) Program, which is funded through the COVID-19 pandemic
response option (CPRO) under ADB’s Countercyclical Support Facility. CPRO was
established as part of ADB’s $20 billion expanded assistance for developing
member countries’ response to the pandemic, which was announced on 13 April.
Of the $500 million loans, $250 million comes from concessional ordinary
capital resources (OCR) with an interest charge at the rate of 2 percent per
year during the grace period and thereafter, for a term of 25 years,
including a grace period of 5 years.
Another $250 million comes from the regular OCR fund with interest to be
determined in accordance with ADB’s London interbank offered rate (LIBOR)-
based lending facility for a term of 15 years, including a grace period of 3
years.
On 30 April, ADB approved a $100 million concessional loan to support the
government of Bangladesh in its efforts to address the immediate public
health requirements of combatting the COVID-19 pandemic.
ADB also released a $350,000 emergency grant for the procurement of medical
supplies and equipment, and $1.3 million from an existing project to provide
one-time cash support to 22,619 trainees to enable them to continue their
ongoing skills training program.
BSS/PR/GM/KU/1949 HRS