Commends country’s commitment to sustainable growth
The World Bank (WB) is set to approve its largest single US$1.20 billion loan Friday for the country’s biggest bridge over the river Padma, officials said Tuesday.
“The proposed loan will be placed before the board of directors at the World Bank headquarters in Washington. The board may approve the financing,” a World Bank spokesperson in Dhaka office told the FE.
“We have already completed negotiations with the government early last month for the $1.20 billion credit in a bid to build Bangladesh’s largest bridge over the Padma”, the official said.
The WB in the negotiations assured Bangladesh of bankrolling $1.20 billion in phases for constructing the 6.15-kilometre-long $2.90 billion Padma Bridge at southwestern Mawa-Janjira points over the Padma.
Boards of directors of two other donors-the Asian Development Bank and the Islamic Development Bank-have already approved $615 million and $140 million loans respectively for the Padma Bridge project.
Bangladesh’s largest bilateral donor Japan has also pledged to lend $400 million credit for constructing the Padma Bridge.
The World Bank, lead donors of the Padma Bridge project, has also assured the government of providing another $300 million loan for the bridge if the overall project cost escalates in the future.
“If the WB board approves the loan Friday, we are hopeful for signing the loan deal next month,” a senior Economic Relations Division (ERD) official told the FE.
The global lender assured the huge concessional loan at 0.75 per cent interest rate which will have 40 years maturity, with 10 years grace period, said the WB official in Dhaka.
The government has already invited pre-qualification bid from international contractors to build the proposed road-cum-rail bridge which aims at minimising economic imbalance between the impoverished southwestern region and the capital.
The World Bank in an assessment report said the proposed Padma Bridge is expected to boost Bangladesh’s gross domestic product growth (GDP) by 1.2 per cent and of the impoverished south-western region by 2.3 per cent.
Till now Bangabandhu Multipurpose Bridge over the river Jamuna is the country’s largest bridge, with a length of 4.80 kilometres. It was constructed in 1997 at a cost of nearly one billion dollars.
The Awami League government has made Padma Bridge one of its top priority projects and it wants to finish the construction by 2013, a year before its five-year tenure expires.
Meanwhile, a WB press release sent on Thursday to the FE said, the Vice President of the World Bank for Sustainable Development, Inger Andersen, has concluded a five-day visit to Bangladesh.
She visited several WB-financed projects focused on climate change, transport, disaster risk management, and rural livelihoods, and also studying upcoming operations in Bangladesh.
During her visit, Andersen also met with Finance Minister A.M.A. Muhit and other senior government officials including the Economic Advisor to the Prime Minister, Minister of Agriculture, the Minister of Food and Disaster Management, the Minister of Communications and the State Minister of Environment and Forests.
“Bangladesh faces multiple challenges on its path of inclusive and sustainable growth leading to lasting poverty reduction,” said Andersen.
“The people and government of Bangladesh have shown what can be achieved by working across sectors to pursue smart policies that respect and protect citizens and the environment they live in. Wherever I went in the country, even in the most disaster prone and cyclone-affected areas, I was impressed by the resilience of people determined to improve their lives and proud to build their country. The World Bank will be there to help them”, she noted.
Over the course of the visit, Andersen toured the site of the proposed Padma multipurpose bridge, to be financed in part by the World Bank and being built to remove a major logistical roadblock to economic development in the southwest region.
The government of Bangladesh has started development of resettlement sites to accommodate households affected by the future location of the bridge.
“Our policy is to ensure that the impact of bridge construction is minimal for people living in the project area, and that those affected are fairly compensated for any loss that may occur”, Andersen remarked.
“This is a major project that will bring much benefit to the entire country. In carrying it out, the country can develop much-needed transport infrastructure that contributes to poverty reduction while ensuring the protection of people, their livelihoods, and the environment they live in”, she observed.
The $1.2 billion Padma Multipurpose Bridge project is scheduled for consideration by the WB Board of Directors later this month.
The WB Vice President visited the south-western coast to witness the effects of climate change. She saw and spoke with beneficiaries of Bank-financed projects, including initiatives such as those to rehabilitate and reinforce multi-function cyclone shelters, strengthen embankments, distribute new salt-tolerant rice seeds, install solar-powered energy systems for homes and shops, and promote sustainable rural livelihoods.
The WB has an active portfolio of US$500 million addressing climate change and environment-related issues in Bangladesh.
The Bank is envisioning support of another $1.2 billion by 2015 to help the government deal with these issues.
Vice President Andersen also visited the Sunderbans, the largest estuary mangrove forest in the world, where the World Bank is supporting analytical work focusing on climate change adaptation, conservation, an alternative livelihoods for forest-dependant poor people.
In partnership with the governments of Bangladesh, Bhutan, India, Nepal, and other south and east Asian states, the World Bank is working on the preparation of a regional wildlife conservation project.
“We must work together to protect the Sunderbans,” said Andersen, “a treasure not just for those in Bangladesh or the region but for everyone in the world. I applaud the efforts underway by the people of Bangladesh and their government to preserve the Sunderbans. Nevertheless, challenges to the rich biodiversity of the area remain, which is why the World Bank will play its part in helping to protect this important ecosystem.”