Green Climate Fund’s Loan Emphasis Adds to Bangladesh’s Debt Burden

Bangladesh is set to receive $3.5 billion in external financing in June, including $1.3 billion from the International Monetary Fund (IMF) as part of the fourth and fifth tranche payments under its loan program, confirmed Bangladesh Bank Governor Ahsan H Mansur.

Amid ongoing uncertainty surrounding the next IMF loan tranches, Bangladesh has secured a green signal from the World Bank for $500 million in budget support under its Resilience and Recovery Development Policy Credit-II programme. This approval, expected to be finalized by June following a negotiation on Wednesday

The World Bank has approved a \$280 million loan for the Chattogram Water Supply Improvement Project (CWSIP), aimed at enhancing safe, climate-resilient water supply and sanitation in Chattogram city. Signed on 10 May 2024, the agreement between Bangladesh's Economic Relations Division and the World Bank outlines a project to improve water access and sanitation, while also boosting the performance and financial sustainability of Chattogram Wasa

Talks between Bangladesh and the International Monetary Fund (IMF) over the next tranches of a $4.7 billion loan ended in Washington without an agreement. Key sticking points include IMF demands for more flexible exchange rates and stronger revenue collection.

Bangladesh and the World Bank signed two financing agreements totaling $850 million to boost infrastructure and job creation. Of this, $650 million will fund the Bay Terminal Marine Infrastructure Development Project in Chattogram, aiming to handle 36% of the country’s container volumes and save about $1.0 million daily by reducing vessel turnaround times.

The Islamic Development Bank (IsDB) will lend $167 million (approximately Tk 20.10 billion) to develop a 220MW solar power plant in Sonagazi, Feni, marking the country’s largest solar facility. The project’s total estimated cost is Tk 21.35 billion, with Tk 1.25 billion funded by the government and EGCB.