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The World Bank will lend $300 million more to Bangladesh to help the country strengthen its local urban institutions to respond to and recover from the Covid-19 pandemic and improve preparedness for future shocks.
In this regard, the Economic Relations Division (ERD) and the global lender’s International Development Association (IDA) signed the loan agreement at the ERD office in Dhaka on Sunday.
ERD Secretary Sharifa Khan and WB Country Director for Bangladesh and Bhutan Mercy Miyang Tembon signed the agreement on behalf of their respective sides, according to an ERD press release.
The credit from IDA, which provides concessional financing, is repayable in 30 years with a five-year grace period. The service charge is 0.75 per cent and the interest charge is 1.25 per cent per annum while the commitment fee is up to 0.50 per cent. The WB has been waiving commitment fees for a long time.
It will finance the “Local Government Covid-19 Response and Recovery Project,” the main objective of which is to strengthen the capacity of urban-centric local government institutions to cope with the pandemic, expand the reach of health services and ensure access to essential civic amenities (water supply, waste management, sanitation and drainage).
“This project will help local government institutions take the right measures to move toward climate-smart urbanization and prepare for resilience in future shocks,” said Tembon.
Besides, through the project, IT-based revenue management will be developed to increase the vaccine distribution program and grow the own income of the city corporations and municipalities.
The project will be implemented by the Local Government Division’s Local Government Engineering Department between January 2022 and December 2025.
“With quick and proactive measures, the Bangladesh government will be able to address the impact of the Covid-19 pandemic,” said Sharifa.
“The project will further support to ensure that the urban areas remain prepared for any future shocks while benefitting the urban poor through job creation, better services, and infrastructure,” she added.
The local government project is expected to carry out labour-intensive public works and benefit 39.9 million urban residents in all eight divisions.
On one hand, it will ensure water supply and sanitation, drainage and other critical services benefitting the low-income areas, slums, and areas exposed to high disease outbreaks and disaster risks.
On the other hand, it will create jobs for poor urban people.