The World Bank has approved $1.05 billion for three projects that will attract private investments worth $2 billion in five years
The Bangladesh Economic Zones Authority (Beza) on Friday got a big boost with news that the World Bank has approved its loan proposal of nearly half a billion dollars.
This development comes at a time when every country in the world is struggling to finance growing spending needs amid the Covid-19 pandemic.
"It is a big development after days of negotiations. We will make Bangabandhu Sheikh Mujib Shilpa Nagar a smart city," said Paban Chowdhury, executive chairman of Beza.
Of the $500 million Private Investment and Digital Entrepreneurship (PRIDE) project, Beza alone will get $467 million for developing road networks with storm water drainage, solar-powered street lights, and climate-resilient water, sanitation and power network.
Paban Chowdhury said the project is now awaiting approval from the Executive Committee of the National Economic Council. He hoped that work under the five-year-tenure project will commence in August.
The World Bank on Friday approved a total of $1.05 billion for three projects to help Bangladesh create quality jobs and accelerate economic recovery from the novel coronavirus pandemic, as well as build resilience in future crises. PRIDE is one of the three projects.
As the largest private sector development project by World Bank in Bangladesh since at least the last 15 years, PRIDE will promote and attract about $2 billion in direct private investment.
The project will also strengthen social and environmental standards in selected public and private economic zones as well as software technology parks.
"It will also create 150,000 jobs, of which a percentage will be dedicated to women – about 40 percent in software parks and 20 percent in economic zones," the World Bank said.
Dr Zahid Hussain, former lead economist of the World Bank Dhaka office, said Beza should complete its reforms in order to ensure proper services to investors.
Beza is attached to the Prime Minister's Office and is responsible for establishing, operating, managing and controlling the economic zones.
Bangladesh Hi-Tech Park Authority (BHTPA) will be an implementing partner of Beza for some components of the project and will expand the Janata Tower, aiming to provide an additional 125,000 square feet of working space to host approximately 200 micro-entrepreneurs, 100 small firms and 30 medium-sized firms.
Expansion will be done by constructing a 12-storied building on vacant land adjacent to the existing building in Karwan Bazar, Dhaka. The area is located in the middle of Dhaka city, characterised by regular traffic jams and heavy crowds, noted the project proposal.
The second project is the $250 million Second Programmatic Jobs Development Policy Credit, aimed at creating fiscal space to support the government's response to the Covid-19 crisis.
This project will also help in recovery and in building the resilience of the economy, of workers and of vulnerable populations in withstanding future shocks.
The global lender has approved the proposal relating to budget support for disbursal within FY2019-20 – just 10 days before the fiscal year ends – to support the government's response to the pandemic.
The third project is the $295 million Enhancing Digital Government and Economy (EDGE) project that will establish an integrated cloud-computing digital platform for all government agencies and improve cyber-security, resulting in savings of $200 million in the public sector's IT investments.
Further, it will build resilience during future crises, whereby the platform will enable the government to operate virtually and deliver critical public services to citizens and businesses.
The project will create 100,000 jobs – with a special focus on women – and train 100,000 youths in digital and disruptive technologies. It will also establish a digital leadership academy and centres of excellence.
According to the World Bank, the project will also help raise the revenues of IT firms by $300 million and promote local IT firms in international markets. To reduce vulnerabilities arising out of the pandemic and prepare for the Fourth Industrial Revolution, the project will help digitalise small and medium enterprises and strategic industries.
This is a concessional loan given by the World Bank's International Development Association (IDA), and will involve around 2 percent interest and service charge a year. Bangladesh currently has one of the largest IDA programmes, totalling over $13 billion.
"This is an extraordinary response to an unprecedented crisis. The Covid-19 pandemic has deeply jeopardised many of Bangladesh's remarkable achievements in poverty reduction and shared prosperity, including livelihoods of its population," said Mercy Tembon, World Bank Country Director for Bangladesh and Bhutan.
"These projects will help the people and the economy bounce back by creating more, and better, jobs and promoting direct private investment in specialised economic zones, while enhancing the foundations for a digital economy."