ADB sings a deal with Bangladesh

The Asian Development Bank (ADB) signed four agreements yesterday to
lend Bangladesh $744 million to help fight off the effects of global
recession. Of the total allocation, a $500 million loan under the
countercyclical support facility (CSF) will support the government's
efforts to mitigate the worst effects of the global economic crisis,
ADB said in a statement. Three other loans of $244 million under the
public expenditure support facility (PESF) will support government
measures to introduce economic and social policy reforms. ADB
emphasises that the reforms are essential to achieve higher and more
inclusive long-term growth and strengthen social safety net
programmes. M Musharraf Hossain Bhuiyan, secretary of Economic
Relations Division (ERD), and Paul J Heytens, ADB's country director
for Bangladesh, signed the agreements at a ceremony at ERD in Dhaka.
"The CSF loan will help the government to stimulate economic recovery
and move ahead with its social safety net programmes to cushion the
impact of the crisis on the poor and vulnerable while maintaining
macroeconomic stability," said Heytens. "The PESF is equally vital to
help the government deliver key public policy reforms," he said.
Sound economic management has enabled Bangladesh to weather major
external shocks and sustain its growth momentum, even if it has not
been spared from the adverse effects of rising petroleum and
commodity prices, and natural disasters such as floods and cyclones,
ADB said. The loans came after a visit to Bangladesh in July by ADB
President Haruhiko Kuroda, where he offered to provide additional ADB
assistance to the government. The CSF, established in June 2009 ,
supports ADB' s developing member countries needing to increase
fiscal spending to counter the global economic crisis. To be eligible
to access the CSF, the countries must be adversely affected by the
global economic crisis, demonstrate sound macroeconomic policies and
have a countercyclical programme in place. The CSF loan has a
five-year repayment term, with a three-year grace period, and will
cost around 200 basis points over ADB's financing cost and pricing.
As the loan will be disbursed in a single trance, it will not involve
any commitment fee.