The Islamic Development Bank (IDB) is going to enroll Bangladesh in its new Member Country Partnership Strategy (MCPS) in September next for four years (2013-16) under which it will provide a significant amount of financial assistance for important sectors like infrastructure and agriculture.“The proposed MCPS is awaiting the formal launching in September when IDB Group President Dr Ahmad Mohamed Ali is expected to arrive in Dhaka,” said an official at the Economic Relations Division (ERD).
He said the IDB for the first time is going to seal an MCPS with Bangladesh, and they are also willing to finalise a Host Country Agreement.
The official informed that the IDB wants to ink the Host Country Agreement with Bangladesh during the official launching of the MCPS. Besides, they are also looking forward to setting up a country office in Bangladesh with the increase of its portfolio in different sectors.
Under the proposed MCPS for the four-year period, the ERD official said, the IDB will provide an indicative financing of $ 1.03 to $ 2.30 billion in Bangladesh’s energy, urban, agriculture and education sectors apart from usual import financing for oil in between $ 8 to 11 billion from the International Islamic Trade Finance Corporation (ITFC) of IDB.
The ITFC has long been the main source of funding for Bangladesh Petroleum Corporation’s oil imports.
Besides, the Jeddah-based multilateral development financing institution is likely to come up with pre-export financing of $ 40 to 80 million in non-oil sector alongside providing $ 105 million under its Islamic Corporation for the Development of the Private Sector (ICD).
The ERD official informed that the IDB may also provide $ 400 million against some projects in Bangladesh under the Public-Private-Partnership (PPP) initiative.
The Bank is also supposed to provide an indicative financing of $ 1.325 to 1.550 billion as import and export credit under its Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC).
After receiving the proposed MCPS from the IDB, the official said, the government held inter-ministerial meetings initiated by the Ministry of Foreign Affairs and then the suggestions and opinions were incorporated before sending the draft to the IDB. Then IDB sent back its opinion on the proposed MCPS to the government before it was sent to the Law Ministry for vetting.
Contacted, Economic Relations Division (ERD) Secretary Md Abul Kalam Azad told UNB that the IDB’s proposed MCPS has already received vetting from the Law Ministry and its formal launching is expected to be held in September this year.
According to sources at the ERD, there are 11 projects undergoing and just completed in Bangladesh under the financial assistance of the IDB. These are Bangladesh Marine Fisheries Capacity Building Project (IDB funding of $ 12.77 million), Greater Rangpur Agricultural and Rural Development Project completed in June, 2013 (IDB funding of $ 8.676 million), Rural Infrastructure Development Greater Rajshahi District Project (IDB financing of $ 19.898 million), Single Point Mooring Project (IDB financing of $ 129 million), Enhancing Quality Seed Supply project ($ 35 million, IDB), Water Supply and Sanitation Project in Cyclone Prone Areas of Bangladesh ($ 14.840 million, IDB), Primary Education Development Project ($18 million, IDB).
The IDB financed projects also include Ashuganj Power Station Efficiency Improvement Project (IDB financing of $ 200 million), Construction of Bhola 225 MW Combined Cycle Power Plant project ($ 180 million, IDB), Enhancing the Madrasa Learning Environment project ($ 10.47 million, IDB) and Agriculture Support for Small Holders in South Western Region of Bangladesh ($ 14 million, IDB).
Introduced in 2010 as an outcome of the IDB Reform Agenda, the MCPS is a tool to mainstream the newly adopted post-reform business model of the IDB Group.
It is thus a strategy document that guides the operations of the IDB Group in its member countries over the medium-term (3-5 years) clearly specifying comparative advantage and niche areas for the IDB Group (IDB, ITFC, ICD, ICIEC and IRTI) as well as financing instruments and role play.
The MCPS also endeavors to promote mutually beneficial partnerships among member countries such as transfer of technology, cross-border investments, trade exchanges and sharing of country experiences, etc., which are collectively known as “Reverse Linkages” (RL).
So far, the IDB has prepared nine MCPS on Turkey, Indonesia, Mali, Uganda, Mauritania, Pakistan, Kazakhstan, Senegal, and Morocco. Ten others are under preparation. – UNB
