ADB to provide $526m for infrastructure

Board of Directors of Asian Development Bank (ADB) has approved a $526 million multitranche financing facility (MFF) to help sustain and increase infrastructure investments in the country, particularly in financing public-private partnership (PPP) projects as well as renewable energy interventions, reports BSS.
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, said a press release in capital yesterday.
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 per cent 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 per cent during the seventh Five-Year Plan to move Bangladesh toward upper middle-income level.
Such targets will require a substantial increase in public and private investments from about 29 per cent of GDP in 2015 to 34.4 per cent by 2020.
The gap in infrastructure financing alone is estimated at between five per cent and six per cent of GDP or a shortfall of nine billion US dollar to $10 billion a year.
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.

ADB to provide $526m for infrastructure

Board of Directors of Asian Development Bank (ADB) has approved a $526 million multitranche financing facility (MFF) to help sustain and increase infrastructure investments in the country, particularly in financing public-private partnership (PPP) projects as well as renewable energy interventions, reports BSS. 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, said a press release in capital yesterday. 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 Bangladeshs 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 countrys infrastructure development through PPIDF 3, he added. Bangladesh has recorded steady average growth of 6.3 per cent 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 per cent during the seventh Five-Year Plan to move Bangladesh toward upper middle-income level. Such targets will require a substantial increase in public and private investments from about 29 per cent of GDP in 2015 to 34.4 per cent by 2020. The gap in infrastructure financing alone is estimated at between five per cent and six per cent of GDP or a shortfall of nine billion US dollar to $10 billion a year. 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 countrys infrastructure deficiencies. The project builds on ADBs 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.