As much as $670 million (around Tk 8,174 crore) from slow-moving World Bank-funded projects will be repurposed, with most of the funds going towards budget support as the government looks to navigate the narrow fiscal space amid a slowing economy.
Of the amount, approximately $500 million will go towards budget support and the remaining amount may be used for new projects, The Daily Star has learnt from finance ministry officials involved with the proceedings.
For all latest news, follow The Daily Star’s Google News channel.The Economic Relations Division submitted the new plan to the WB last week for the go-ahead; the matter will be discussed during the visit of a WB vice-president to Bangladesh next month.
The move to re-direct funds from slow-moving projects comes at the WB’s suggestion after the interim government sought fresh funding from development partners in August last year for budget support, and banking and energy sector reforms.
Subsequently, the ERD sat down with the WB and project officials on October 14 last year and decided to repurpose $723.64 million from 11 ongoing projects.
After several meetings, it was decided that $670 million could be redirected from the projects, the finance ministry officials said.
Over the years, the WB has approved about $3.2 billion for 11 projects. However, as of June last year, only $661.8 million could be disbursed due to delays in project implementation, according to ERD and project officials.
One of the slow-moving projects is a road safety project, conceived in the light of the alarming rise in road crashes and deaths over a decade.
The government took the Tk 4,988.14 crore project in April 2023, more than a year after the WB approved a $358 million loan to help Bangladesh improve road safety and reduce fatalities and injuries from road accidents on selected high-risk highways and district roads.
The project will have several components and will be implemented by the Roads and Highways Department, Bangladesh Road Transport Authority, the Directorate General of Health Services and Bangladesh Police.
It will pilot comprehensive road safety measures, including improved engineering designs, road signs and markings, pedestrian facilities, speed enforcement, and emergency care from Gazipur to Elenga and Natore-Nawabganj highways.
The measures will help reduce road traffic deaths by more than 30 percent on the two highways, as per the WB’s estimates.
It will improve post-crash care, which is critical in saving lives, and will also set up an ambulance service via a toll-free number and upgrade emergency care services in selected district hospitals and upazila health complexes along the two national highway corridors.
More than 20 months after the project’s approval, the authorities could not hire consultants. As of December last year, the project saw less than 1 percent financial progress, documents show.
Subsequently, it was decided that $75 million from the project would be repurposed.
Another slow-moving project is the “Livestock and Dairy Development Project” involving Tk 4,280 crore.
The project was launched in January 2019 with the aim of boosting livestock and dairy farming in Bangladesh.
Under the project, 26 types of agricultural machinery alongside chemical products like pesticides would be provided to local farmers.
The WB was supposed to provide $500 million for the project from December 2018 to September 2023. As the project authority failed to use the loan, the loan period was extended to July 2025.
As of June last year, a total of $281.58 million was disbursed, according to WB document.
Subsequently, it was decided that $100 million from the project would be repurposed.
In May 2019, the government signed a $100.5 million financing agreement with the WB to improve the condition of living in four large neighbourhoods in Dhaka city, benefitting about a million residents.
The Dhaka City Neighbourhood Upgrading project will enhance public spaces and urban services in four neighbourhoods — Kamrangir Char, Lalbagh, Sutrapur-Nayabazar-Gulistan, Khilgaon-Mugda-Bashabo — under Dhaka South City Corporation.
As of June last year, only $20.83 million was disbursed, according to documents. Subsequently, it was decided that $22 million from the project would be redirected.
The other eight slow-moving projects from which funds will be re-purposed are: higher education accreditation and transformation; accelerating and strengthening skills for economic transformation; environment sustainability and transformation; enhancing digital government economy; sustainable forest and livelihood; Bangladesh Private Investment and Digital Entrepreneurship; building resilient infrastructure for adaption and vulnerability reduction; and developing climate-smart agriculture and water management, according to a ERD document.
