Bangladesh to get $700m budget support from AIIB

The Asian Infrastructure Investment Bank (AIIB) will provide Bangladesh with $700mn in budget support in the current fiscal year, said Economic Relations Division (ERD) officials.

According to officials, Bangladesh sought budget support during a sideline meeting with the president of the AIIB at the organisation's annual meeting in Samarkand, Uzbekistan on 23-26 September. The president of the organisation gave preliminary assurances about the support.

ERD Secretary Md Shahriar Kader Siddiky led the Bangladesh delegation on that tour. 

The AIIB is expected to provide $300 million on the condition of certain reform programmes related to climate change and the environment and $400 million for emergency support on natural disaster management.

According to ERD sources, in light of the current economic situation, the government has already requested budget support from various development partners. This includes a request for $1 billion each from the World Bank and the Asian Development Bank (ADB) to settle outstanding oil and gas import bills.

Although officials hinted at uncertainty over the budget support for these outstanding bills this fiscal year, the government expects to receive $750 million in budget support from the World Bank under "Green and Climate Resilient Development Credit" by next December. 

Additionally, $400 million in budget support from the ADB is anticipated under the LDC Graduation Support Programme in the same timeframe.

The ERD is also seeking $500 million in budget support from the ADB for banking sector reforms in FY25, with the ADB having announced a total loan of $1.5 billion to the government in three tranches for the reform.

Furthermore, Japan has been requested for $1 billion in budget support for the current fiscal year.

ERD officials said $100 million from South Korea, and $100 million from the Opec Fund for International Development are expected to be available as budget support in FY25.

A request for €200 million in budget support has been made to the European Investment Bank for the current financial year. However, ERD officials indicated that the bank has not provided any response regarding this request.

Officials said ERD Secretary Md Shahriar Kader Siddiky during the Uzbekistan tour briefed the AIIB president about the commitment and priorities of the interim government for making a discrimination-free democratic Bangladesh by carrying out essential reforms in all the necessary sectors of the country including its social and economic landscapes.

He sought sustained and meaningful AIIB cooperation in its new journey for transformative change and advancements in Bangladesh.