WB goes slow in giving NOC to red-listed projects

FT ONLINE

The World Bank (WB) is allegedly going 'very slow' in providing no objection certificate (NOC) in favour of environmentally critical projects which are to be financed from its own coffer, sources said.

Seven such red-listed projects, to be financed under the WB-funded 'Financial Sector Support Project (FSSP)' and implemented by the central bank, have been waiting for almost a year to get its nod, they added.

To grant funds for such environmentally hazardous projects from the FSSP, a prior approval of the World Bank is mandatory.

Now the Bangladesh Bank (BB) has requested the government to persuade the Washington-based multilateral donor agency to quicken the process of providing NOC so that funds can be released for the implementation of the projects.

For the fiscal year 2017-18, Tk 10.10 billion was allocated in the budget from the FSSP for non-ADP projects. The seven projects involve a total of Tk 6.60 billion.

The BB informed the ministry of finance (MoF) recently that due to the non-availability of NOC from the WB, no money from non-ADP portion of the fund could be disbursed so far.

Officials said in most cases, the seven red-listed projects are waiting for over a year to get the WB approval. The projects are owned by Knit Plus Ltd, Tosrifa Industries Ltd, SM Knitwears Ltd, GPH Ispat Ltd, SR Shipping Ltd, Jahan Marine (Pvt) Ltd and Knit Concern Ltd.

Contacted over telephone, deputy general manager of Financial Sector Support and Strategic Planning Department (FSSSPD) Mezbaul Haque said that low-cost finance are made available for manufacturing sector from the funding project.

Though the projects are listed as high risky, loans are only being granted once the projects are found fully environmentally compliant, he said.

Mr Haque said the lender wants to be sure that proper technology and modern equipment must be used so that the projects do not cause any harm to the environment.

"Ensuring proper mitigation measures is compulsory to get funding from the FSSP," he noted.

The FSSP is a US$292 million project which the World Bank is funding from its low-cost International Development Association (IDA) initiative. It charges 0.75 per cent interest and offers 36 years of repayment period.

The BB provides loans to different banks and financial institutions from the FSSP. Until now, some 42 non-red-listed projects have been financed from the FSSP.

World Bank officials in Dhaka were not available for comments despite several attempts.