TDS Desk:

Bangladesh is getting US$400 million from the Asian Infrastructure Investment Bank (AIIB) as budget-support credit to finance policy actions for infrastructural development in climate-critical sectors, sources said.

The agreed loan will be given under the AIIB’s climate policy-based financing arrangement (CPBF) in a project titled ‘Climate Resilient Inclusive Development Programme (Sub-programme 2)’. The recipe will be co-financed by the Asian Development Bank (ADB).

Finance division, the ministry of environment, forest and climate change, planning commission, cabinet division, the central bank, local government, rural development and cooperatives, and water ministry, agriculture ministry, railways ministry, road transport and highways division, power division, energy and mineral resources division, and sustainable and renewable energy development authority will implement the project.

The finance division expects the funds will be available by June this year.

The China-led multilateral development bank had provided $400 million in June last year under the ‘Climate Resilient Inclusive Development Programme.

The previous programme had aimed at critical structural reforms meant for building climate-resilience in development activity.

Mainstreaming climate-change adaptation and-mitigation actions for a sustainable, resilient and inclusive growth was core mission of the lending package which helped the government meet forex-reserve target set by the International Monetary Fund (IMF).

A senior official of the finance ministry that the programmer’s policy actions have to be completed by March this year and be sent to the AIIB and the ADB the development-policy letter by April.

“Thereafter, the loan processing will be completed by June,” he said about the funding, coming at a time when the interim government is searching all possible sources of foreign financing in particular to prop up foreign-exchange reserves.

The sub-programme 1 had supported the government in undertaking key policy reforms to mainstream climate adaptation, mitigation, and disaster resilience in critical sectors, and unlocking climate investments in Bangladesh.

Also, the lending package had included three policy-reform areas: enabling environment for climate-change actions, reinforcing climate-change-adaptation actions, and accelerating climate-change-mitigation actions to address some of the critical binding constraints.

By implementing the programme the government targets outcomes like enhancing sustainable and climate-focused development pathway, strengthening resilience and reducing risk and vulnerability to adverse climate-change impacts, mitigating greenhouse-gas emissions and transition into a low-carbon economy.