REJAUL KARIM BYRON

The World Bank Group is scaling up its lending to Bangladesh in non-concessional terms by as much as three times to prepare the country for its impending LDC graduation, which would close the doors to low-cost funds.

At present, all the loans that Bangladesh gets from the Washington-based multilateral lender come from the International Development Association, its concessional lending arm for the world’s poorest countries.

As the country’s economic position improves, it graduates from IDA and into the International Bank for Reconstruction and Development (IBRD), the WB arm that lends to middle-income countries at commercial rates.

IDA scales up the share of loans in IBRD terms as the country nears graduation to prepare for borrowing at market-based rates.

Bangladesh is now at that stage, which is a “blend” country in the WB’s categorisation.

So in IDA20, the IDA’s latest three-year lending programme starting from July 2022 and ending in June 2025, Bangladesh would be receiving $6.05 billion, 33 percent of which would be on market-based rates, The Daily Star has learnt from finance ministry officials.

In IDA19, where Bangladesh was the largest recipient country, 13.7 percent of the loans were on market-based rates.

The country was officially informed last week of its share in IDA20, which began a year ahead of schedule after the global coronavirus pandemic depleted the previous pot in two years instead of three.

Of the record $93 billion raised for IDA20, Bangladesh has been allocated 6.5 percent, while 39 African nations would be getting 70 percent of the pot.

In IDA19, Bangladesh got 5.5 percent of the pot of $82 billion.