Private Sector Development Support Project
Deal inked with WB for $130m additional fund
STAFF REPORTER
A financial agreement was signed between the Government of Bangladesh and the World Bank for $130 million of additional loan yesterday to scale up support for the recently licensed and new economic zones to attract foreign and domestic investment as well as to create more jobs in the countrys manufacturing sector.
The agreement was signed by Economic Relations Division (ERD) Additional Secretary Kazi Shofiqul Azam and World Bank Acting Country Director Rajashree Paralkar on behalf of the government and the World Bank respectively, at the ERD in the citys Sher-e-Bangla Nagar in the capital yesterday.
With this additional financing, the World Banks support to the project stands at $170 million. The credit from the World Banks International Development Association, its grant to low-interest loan arm, has a 38-year term, including a six-year grace period, and a service charge of 0.75 per cent.
The additional financing to the Private Sector Development Support Project (PSDSP) will help develop new Economic Zones through identifying, licensing, and negotiating Public-Private Partnership for economic zone development.
In the last two years, PSDSP helped with the licensing of 16 Economic Zones and Hi-Tech Parks, and with the assessment of 33 new sites for development as Economic Zones over the next several years.
Bangladesh needs to create more and better jobs in the manufacturing sector to accelerate growth and poverty reduction. The economic zones play a critical role in attracting private investment and creating jobs, as the benefits are many. For example, the new zones have reduced the time to register a business by 82 per cent. said Rajashree Paralkar, acting World Bank country director for Bangladesh.
The financing will directly contribute to the governments vision of establishing 100 zones over the next 15 years and promoting socially and environmentally responsible industrial growth for Bangladesh, added the acting country director of the Washington-based lending agency.
The financing will also help construct off-site infrastructure and works, such as land filling, construction of access roads, utilities networks, buildings and rail landings; and zone-specific infrastructures, such as perimeter walls, central effluent treatment plants, water treatment plants, and other facilities.
ERD Additional Secretary Kazi Shofiqul Azam said, Both the sixth and the seventh Five-Year Plans considered establishing new Economic Zones as a cornerstone to strengthen the manufacturing sector and promote efficient use of skilled labour, land, and other resources, said Kazi Shofiqul Azam, additional secretary, Economic Relations Division, Government of Bangladesh.
