WB to provide $280m to Bangladesh to improve Chittagong Wasa; deal signed

DHAKA, May 11 (V7N) –A financing agreement was signed on Saturday between the government of Bangladesh and the International Development Association (IDA) of the World Bank Group for an amount of $280 million to implement the “Chittagong Water Supply Improvement Project (CWSIP)”. 

Md Shahriar Kader Siddiky, secretary, Economic Relations Division (ERD) and Gayle H Martin, country director (Interim), World Bank, signed the agreement on behalf of their respective sides. 

The project will be implemented by the Chittagong Wasa of the Local Government Division (LGD), Ministry of Local Government, Rural Development and Cooperatives by December 31, 2030. 

The project aims to increase access to safe, reliable and climate-resilient water supply and improved sanitation in Chittagong; and to improve the performance and financial sustainability of Chittagong Wasa, said an ERD press release.

The terms and conditions of the $280 million loan to be received from the World Bank for the project are as follows:

The amount of $140 million (equivalent to 105.20 million SDR) will be provided from the Scale-up Window-Shorter Maturity Loan (SUW-SML) of the World Bank. 

The repayment period of the loan is 12 years, including a grace period of 6 years. No service charge, commitment fee or interest will be paid on the amount withdrawn from this loan. 

The remaining $140 million, equivalent to 21,345,100,000 Japanese Yen, will be provided from the Scale-up Window (SUW) of the World Bank. 

In this case, 0.25% will be paid as a Front-end Fee. The repayment period of this loan is 35 years, including a grace period of 5 years. A Commitment Fee of 0.25% is payable on the undrawn amount of this loan, and the interest rate of this loan will be Tokyo Overnight Average Rate (TONA) + Variable Spread. 

The release said the World Bank is the largest multilateral development partner of Bangladesh. The World Bank has committed over $43.50 billion for Bangladesh since its independence, which indicates the direction for deepening cooperation between Bangladesh and the World Bank. 

At present, the World Bank is financing $13.10 billion for forty-seven ongoing projects that cover different sectors, including economic and social development, institutional reforms, infrastructure development and energy sector development.