The Asian Development Bank on Wednesday said it would invest its pledged US$ 8 billion loans in five priority areas including easing infrastructure constraints, improving human capital and supporting economic corridor development over the next five years.
The Manila-based multilateral lending agency said this while launching its Bangladesh Country Partnership Strategy for 2016-2020 at the National Economic Council auditorium of the Planning Commission in Dhaka.
The ADB also identified some development challenges for Bangladesh including dependence on one product (readymade garment) in export earnings, inadequate private sector investment, lack of sufficient infrastructure, shortage of skilled manpower, rural poverty and vulnerability to climate change effects in moving towards being an upper middle class country.
The ADB provided US$ 5 billion in loans to the country under the previous strategy for 2011-2015.
‘We will provide US$ 8 billion to the country under the new strategy, which is 60 per cent higher than the previous one,’ ADB country director Kazuhiko Higuchi said at the function.
The country needs higher level of public and private investment during the period to achieve higher, inclusive and sustainable economic growth over 7 per cent and ADB will increase its lending including expanding private sector operations, he said.
He said that ADB would continue its focus on transport, energy and power, urban and infrastructure development like special economic zones to ease the country’s infrastructure constraints.
Higuchi said that Bangladesh would get 50 per cent of the pledged US$ 8 billion as concessional loans with 2 per cent interest and rest of the loans would be on market-based interest rate which is London Interbank Offered Rate (libor)-plus 0.50 per cent.
The other priority areas include improving rural livelihood and infrastructure, climate and disaster resilient infrastructure and services, and regional connectivity, according to the strategy which was approved by ADB board of directors on September 29.
The strategy will also focus on creating conditions for greater private sector participation, promoting public private partnership in development process, addressing institutional capacity and governance improvement, deepening regional cooperation and integration and promoting gender equality.
Economic Relations Division senior secretary Mohammad Mejbahuddin Ahmed also said that there were some challenges including infrastructure deficit, domestic resource mobilisation, productivity, private sector investment for sustainability of higher economic growth.
The government is doing its best to overcome the challenges, he said.
Government officials and representatives from development agencies were present at the function.
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