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ADB to provide $52.60cr for infrastructure

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Published: 05:19, 19 July 2017   Update: 15:18, 26 July 2020
ADB to provide $52.60cr for infrastructure

Staff Correspondent:  The Asian Development Bank (ADB) has approved a US$526 million, $52.60 crore,  Multitranche Financing Facility (MFF) to sustain and increase infrastructure investments in the country.

The financial support will go to particularly in financing Public-Private Partnership (PPP) projects as well as renewable energy interventions, said a press release.

The assistance consists of a $500 million market-based loan to finance medium and large-scale PPP infrastructure projects, and a $26 million concessional loan to finance small and medium-sized renewable energy and energy efficiency facilities, primarily in the rural areas of the country.

Both loans are under the Third Public-Private Infrastructure Development Facility (PPIDF 3).

A $750,000 technical assistance was also approved from the Financial Sector Development Partnership Fund to further strengthen the capacity of the Infrastructure Development Company Limited (IDCOL), a state-owned financial institution mandated by the Government to promote and finance PPP projects.

"Infrastructure development is an integral part of Bangladesh's rapid economic growth, but it is undeniable that in order to sustain this growth, the country would need an increased investment in infrastructure that can be filled in by the private sector," said Peter Marro, an ADB Principal Financial Sector Specialist.

"We hope to continue our contribution to the country's infrastructure development through PPIDF 3," he added.

Bangladesh has recorded steady average growth of 6.3 percent between 2011 and 2015, enabling it to attain lower-middle income status in July 2015.

But real Gross Domestic Product (GDP) growth would need to reach an average annual rate of 7.4 percent during the seventh Five-Year Plan to move Bangladesh toward upper middle-income level.

According to the Bangladesh Bureau of Statistics (BBS), Bangladesh has already achieved 7.24 percent GDP growth in the last 2016-17 financial year and is on the track to touch 7.4 percent GDP growth with current fiscal.

The gap in infrastructure financing alone is estimated at between five percent and six percent of GDP or a shortfall of nine billion US dollar to $10 billion a year, the press release added.

The Third Public-Private Infrastructure Development Facility (PPIDF 3) is a continuation of the previous efforts of ADB and the government and the strong partnership between ADB and IDCOL to address the country's infrastructure deficiencies.

The project builds on ADB's support leading to the enactment of the PPP Act and institutional support to the PPP Authority and will promote commercial financing for PPP projects to reduce pressure on direct financing from the public budget to meet the growth target.



risingbd/Dhaka/July 19, 2017/Yeamin/Mukul

 

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