As multinational development partners released funds amid Covid-19 that affected the economy badly, Bangladesh received a record US$710 crore, equivalent to Tk 60,350 crore, in foreign loans and grants in the just-concluded fiscal year 2020-21 (FY21).
Of the total Tk 60,350 crore, around Tk 57,500 crore came as loans while the rest Tk 2,850 crore as grants, according to the Economic Relations Department (ERD) of the Ministry of Finance.
"It is encouraging that our development partners have released a significant amount of their committed loans and grants. It is very positive for the economy at present situation, especially because the pace of revenue collection has slowed down since the outbreak of Covid-19 in March 2020," said an ERD official.
Multinational development partners including the World Bank, Asian Development Bank (ADB) are providing additional financial assistance to Bangladesh for purchasing vaccines and other healthcare equipment to cope with the Corona infections.
According to ERD, Bangladesh received the highest foreign loans and grants in the fiscal year 2019-20, which was US$ 738 crore, amounting to Tk 62,730 crore.
In FY21, Bangladesh got the highest loans from the World Bank, which had released US$270 crore equivalent to Tk 22, 950crore. The Asian Development Bank (ADB) gave the second-highest loans of US$170 crore, equivalent to Tk 14,450 crore.
Reviewing the data of the last six financial years, it has been found that the trend of foreign loan and grants disbursement maintained an upward trend from the financial year 2016-17. In the same year, the disbursement amount increased from US$ 300 crore to US$ 637 crore. Then the country received US$ 654 crore in the financial year 2018-19. In the last two fiscal years—FY19 and FY20 the country received more than US$ 700 crore in foreign loans and grants.
When contacted, a top ERD official said significant amounts of loans and grants are being released from the development partners due to Corona. In addition, the pace of implementation of various development projects has also increased, he said, adding that Bangladesh's relationship with development partners is now better than ever. Due to these reasons, the disbursement of foreign loans and grants has been increasing day by day, he said.
According to ERD, multilateral development partners, particularly the WB, ADB, Asian Infrastructure Investment Bank (AIIB), International Monetary Fund (IMF) have come forward with financial assistance amid the Covid-19 pandemic.
So far, Bangladesh has received US$120 crore from the WB and US$50 crore from IMF as budget support. AIIB, established at the initiative of China, is giving US$50 crore and ADB is lending US$100 crore as part of budget support.
ADB is also providing another US$25 crore for purchasing healthcare equipment and social security purposes.