AIIB pledges $250m for economic recovery from pandemic

The Asian Infrastructure Investment Bank (AIIB) will give US$250 million as loan for sustainable economic recovery in Bangladesh which fallout by the Covid-19 pandemic.

The loan will be used for implementing a project titled ‘Sustainable Economic Recovery Programme (Subprogramme-1)’ to early recovery of the economy.

Secretary of the Economic Relations Division (ERD) Fatima Yasmin and Vice President of AIIB’s investment operations region 1 DJ Pandian, signed the loan agreement on behalf of Bangladesh and AIIB respectively.

The signing ceremony was held virtually on November 2.

The government has taken the project with the aim to bring policy reform to recover the country's economy from the harmful effects of Covid-19 and to ensure sustainable growth.

The lead financier of the programme is the Asian Development Bank (ADB) and AIIB is contributing $250 million as the co-financier.

Under this programme, steps will be taken to reduce and rationalise expenditure by reforming and strengthening the Public Finance Management (MFS) system and to expand financial resources.

The programme also aims to create financing opportunities for industries and entrepreneurs such as small, medium and cottage industries whose sources of funding are insufficient.

The loan will be received in standard terms and conditions of AIIB. The repayment period of the loan is 20 years including three years grace period. The payable frontend fee is 0.25 percent and commitment fee is 0.25 percent per annum for undisbursed amount.