Disbursal fails to catch up with WB loan commitments
Compared to FY18, the World Bank disbursed only $519 million more in FY22
The net loan pledge by the World Bank to Bangladesh edged up $4.6 billion in the last five years, while the disbursement ratio registered a fall, according to the lender's portfolio.
Compared to FY18, the World Bank disbursed only $519 million more in FY22, show a WB report. At the end of FY22, the undisbursed amount was $8.5 billion as it was $7 billion in FY18.
According to the report, the commitment-disbursement ratio declined to 16.1% in FY22. The figure was at 17.8% in FY21, 15.2% in FY20, 21.2% in FY19 and 21.8% in FY18.
A tripartite meeting on 11-12 September in Dhaka by the global lender, implementing agencies and the Economic Relations Division (ERD) identified a number of project issues such as slow start, readiness and improper synchronisation between the government and the lender mainly responsible for delaying the disbursement.
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Other key implementation issues the meeting identified are complex technical design, complex institutional arrangement for implementation, inadequate project staffing, inconsistency in project details and inadequate ADP allocation availability.
The portfolio shows the transport sector got the highest $2.94 billion loan commitments from the WB till FY22, but the disbursement hovered around $343.4 million from FY18 to FY22.
In contrast, the social protection and job sector witnessed the highest $1.27 billion disbursement in the preceding five years against a $1.34 billion loan pledge. Disbursements in the health sector was $894.4 million in the period as the total commitment was $1.3 billion.
The tripartite meeting discussed special measures to speed up the disbursement. The meeting talked about six power projects and 18 other development schemes with more than 80% undisbursed loan commitments.
The WB and the implementing agencies agreed to resolve the identified issues promptly, said ERD officials who joined the meeting.
They also said that the meeting decided on revising slow-moving projects, finishing the restructuration early and jointly working on loan agreement extensions.
According to stakeholders, several projects with more than 80% undisbursed commitment are about to reach the deadlines.
For example, the loan loan agreement for the Bangladesh Regional Waterway Transport Project-1 was signed with the WB in 2016. Around 90% of the loan in this project, which has been going on for six years, has not been used yet.
The WB has a net commitment of $234 million in this project supposed to be completed in 2025.
Other key projects with more than 80% undisbursed loan commitments include Dhaka City Neighborhood Upgrading Project; Rural Water, Sanitation and Hygiene for Human Capital Project; Enhance Digital Government and Economic Project; Private Investment and Digital Entrepreneurship Project; Dhaka Sanitation Improvement Project and Western Economic Corridor and Regional Enhancement Program.
Power sector projects with disbursement issues are – Bangladesh Power System Reliability and Efficiency Improvement Project; Enhancement and Strengthening of Power Network in Eastern Region; Scaling-Up Renewable Energy Project; Ghorashal 4th Unit Re-Powering; Rural Electrification and Renewable Energy Development II (RERED II) Project and Electricity Distribution Modernization Program.
