WB offers quick access to 10 pct of undisbursed loans for Bangladesh's crisis response-Xinhua

WB offers quick access to 10 pct of undisbursed loans for Bangladesh's crisis response

Source: Xinhua| 2024-05-13 21:57:45|Editor: huaxia

DHAKA, May 13 (Xinhua) -- The World Bank has opened a new financing window that will enable Bangladesh to access 10 percent of the undisbursed amount of its loan portfolio with the global lender for emergency use during a crisis.

The amount would be 847 million U.S. dollars if the volume of pledged loans in the pipeline for the last fiscal year is considered, officials of the Economic Relations Division (ERD) were quoted by Business Standard as saying on Monday.

They said the amount would be greater if the undisbursed amount of the current fiscal year is calculated.

The new feature, referred to as the Rapid Response Option(RRO), is part of the World Bank's recently approved Crisis Preparedness and Response Toolkit.

The toolkit is aimed at helping countries quickly repurpose existing balances in the World Bank portfolio for emergency response when crises such as natural disasters, health shocks, or conflict events occur.

In April, in a letter to Bangladeshi Finance Minister Abul Hassan Mahmood Ali, the World Bank informed Bangladesh about the feature and invited the country to "establish a new Rapid Response Option."

The World Bank's new initiative came as another relief for the country's foreign exchange reserve after an IMF team last week agreed to release 1.15 billion dollars, nearly double the amount previously scheduled, in the third tranche of its 4.7 billion dollars loan package.

The introduction of this new initiative, offering added flexibility, will complement existing mechanisms, empowering governments to deliver prompt responses in times of crisis, it said.

However, some initial steps need to be taken, including signing an agreement with the World Bank beforehand, to get the fund.