Bangladesh signs $120m WB loan agreement

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Dhaka, Mar 15: The government has penned a loan agreement of $120 million with the International Development Association (IDA) of the World Bank (WB) group to implement a “Climate Smart Agriculture and Water Management” project.

The Scale-Up Window (SUW) loan, signed on 15 March, will be implemented jointly by the Bangladesh Water Development Board (BWDB), the Directorate of Agricultural Extension (DAE), and the Directorate of Fisheries (DoF), read a press statement of the finance ministry.

Economic relations division secretary Fatima Yasmin and Acting Country Director of the World Bank, Dandan Chen, signed the agreement on behalf of their respective sides.

Of the total loan amount, $100 million will be provided to BWDB and $10 million each, will be provided to DAE and DoF. The project is to complete by 30 June 2026.

The objectives of this project are, to rehabilitate and modernise Flood Control Drainage and Flood Control Drainage Irrigation (FCDI) infrastructure for climate resilient water resource management, to promote more efficient use of on-farm water resources, and the adoption of Climate-Smart Agricultural (CSA) practices for both crops and fisheries.

The project will help enhance agricultural productivity and save around 50% of irrigation water in crop fields, using at least 12 climate smart technologies in the project area. It will increase fish production some 20% by introducing climate smart aquaculture technology.

The credit amount to be repaid in 35 years (with a five year grace period), will have an interest rate of 0.25% on the credit amount, with 0.25%  commitment charge on any undisbursed credit balance.

Since its membership in 1972, Bangladesh has so far received about 29% of all its foreign assistance from the World Bank.