By the end of the current fiscal year (2024–25), Bangladesh may receive up to $3.618 billion in budget support. The Ministry of Finance and Economic Relations Division (ERD) are hopeful that the funds will be released by June 30, with support from several global lenders.
Who’s Giving the Money?
The expected budget support includes:
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$1.3 billion from the International Monetary Fund (IMF)
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Additional funds from:
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World Bank
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Asian Development Bank (ADB)
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Asian Infrastructure Investment Bank (AIIB)
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Japan
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ADB Approves $900 Million Loan
On Thursday, ADB approved $900 million in policy-based loans for Bangladesh to:
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Strengthen the banking sector
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Address climate-related challenges
Two agreements are being signed on June 20:
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$500 million under the Banking Sector Reforms Program
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$400 million under the Climate-Responsive Inclusive Development (CRID) Program – Phase 2
The funds are expected to be released within a week of signing.
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World Bank and IMF Funding Updates
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World Bank is reviewing a $500 million Resilience and Recovery Development Policy Credit-2. Once approved, the agreement and disbursement could happen within June.
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IMF’s board will meet on June 23 to decide on the 4th and 5th tranches of its $4.7 billion loan program. This will release $1.3 billion if approved. Disbursement may follow within 48 hours.
AIIB and Japan Support Also Expected
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AIIB will hold a board meeting on June 23 in Beijing and may sign the CRID program agreement with Bangladesh the next day.
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Japan has confirmed a $418 million loan under its Development Policy Loan for Economic Reform and Climate Resilience, expected to be disbursed next week.
$100 Million from OPEC Fund Delayed but Coming Soon
In April, Bangladesh signed a $100 million loan with the OPEC Fund under the Strengthening Economic Management and Governance Program. Disbursement has been delayed due to administrative issues but is now expected within the coming week.
$1.1 Billion Already Received This Fiscal Year
So far in FY2024–25, Bangladesh has already received:
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$500 million from the World Bank in December, under the Green and Climate Resilient Development Program
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$600 million from ADB in early June under the Economic Management and Governance Program (Phase 1)
Why So Much Budget Support?
According to Mustafa K. Mujeri, Executive Director of the Institute for Inclusive Finance and Development:
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Bangladesh borrows budget support to cover budget deficits
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The country’s spending is higher than revenue
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While helpful, relying too much on these loans can increase future debt
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It’s important to spend these funds on productive sectors
In addition to budget support, project loans from the World Bank and ADB are also rising.
World Bank Approves $640 Million for Two Projects
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$350 million for Petrobangla to import liquefied natural gas (LNG)
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$290 million for air pollution control
These fall under: -
Energy Sector Security Enhancement Project
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Bangladesh Clean Air Project
ADB Approves $404 Million for Infrastructure Projects
ADB will provide:
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$200 million for the Power Transmission and Renewable Energy Integration Project
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$204 million for SASEC Dhaka-Northwest Corridor Road Project (Phase 2)
Budget Support Over the Years (in Billion USD)
| Fiscal Year | Amount Received |
|---|---|
| 2019–20 | $1.00 |
| 2020–21 | $1.09 |
| 2021–22 | $2.59 |
| 2022–23 | $1.76 |
| 2023–24 | $2.03 |
Budget support increased especially after COVID-19 and the Russia-Ukraine war, as Bangladesh sought more external financing to stabilize the economy.
source: TBS
