World Bank, Bangladesh sign $500 million deal to strengthen governance and institutional resilience

The Government of Bangladesh has signed a $500 million financing agreement with the International Development Association (IDA) of the World Bank Group to implement the "Bangladesh Strengthening Governance and Institutional Resilience (SGIR)" programme.

The agreement was signed on 21 June by Md Shahriar Kader Siddiky, secretary of the Economic Relations Division under the Ministry of Finance, and Gayle H Martin, the World Bank's interim country director for Bangladesh.

According to a press release, the SGIR programme is designed to enhance governance and build institutional resilience in Bangladesh's public and financial sectors.

The Finance Division will lead the implementation of the programme, with support from other key government bodies including the Cabinet Division, Bangladesh Bank, Office of the Comptroller and Auditor General, Planning Division, Statistics and Informatics Division, and the National Board of Revenue.

Out of the total loan, $226.72 million will come from the World Bank's Performance-Based Allocation window. This portion is repayable over 30 years with a five-year grace period, carrying an interest rate of 1.25%, a service charge of 0.75%, and a 0.50% commitment fee, which the World Bank has agreed to waive.

The remaining $273.28 million will be disbursed from the IDA's Shorter Maturity Loan (SML) window. This part of the loan carries no interest and is repayable over 12 years, with a six-year grace period. A 0.50% commitment fee on this portion has also been waived by the World Bank.

The World Bank is Bangladesh's largest multilateral development partner, having committed over $43.77 billion since the country's independence. It currently supports 48 ongoing projects in Bangladesh, with a total financing of $13.37 billion, covering sectors such as infrastructure, energy, institutional reforms, and economic and social development.