The government has signed a $250 million loan (budget support) agreement with the World Bank.
Fatima Yasmin, secretary to the Economic Relations Division (ERD) under the Ministry of Finance, and Mercy Tembon, country director of the World Bank's Dhaka office, signed the deal on Sunday.
The agreement was signed as part of the "Second Jobs Development Policy Credit (DPC-2)" programme.
The loan is to be repaid in 30 years with five years of grace period, and will have an interest rate of 1.25 percent along with a 0.75 percent service charge for the outstanding amount.
ERD officials said the government in recent years has laid emphasis on reform and modernisation of some policy strategies and regulations to support extended job creation, improved job quality, and inclusive access to jobs for all the Bangladeshi nationals.
In this context, the government and the World Bank Group have got engaged in a three-year programme of reforms for the period of 2018-2021, and the World Bank agreed to extend financial assistance of $750 million in this regard.
The first programme in the series (Job DPC-1) was completed in fiscal year 2018-19 where the International Development Association (IDA), part of the World Bank, provided $250 million, and in its continuity has agreed to provide another $250 million for the second programme (Job DPC-2) in the current fiscal year 2019-20.
Under the Job DPC programme, the government agreed to revise and update some existing legislations and rules, and reengineering business processes which eventually contribute to improving Bangladesh's position on the doing business index.
Improvement in the doing business ranking will facilitate the process of attracting new investments and thus create employment opportunities, said the ERD.
This DPC tranche-2 is due to be released in fiscal year 2020-2021. In order to address the adverse impacts of Covid-19 pandemic, the IDA agreed to frontload this disbursement in fiscal year 2019-2020 on request of the government of Bangladesh.
This fund will be utilised for emergency health related services and for implementing stimulus packages announced by the prime minister.