ADB approves $50million loan to Bangladesh to fund PPP infrastructure projects

“The assistance will help strengthen government capacity to develop PPP infrastructure projects and catalyze greater private sector infrastructure investments,” said ADB Principal Financial Sector Specialist Dongdong Zhang.

The Asian Development Bank (ADB) has approved a $50 million loan to the Government of Bangladesh to fund public-private partnership (PPP) infrastructure projects in the country.

"The assistance will help strengthen government capacity to develop PPP infrastructure projects and catalyze greater private sector infrastructure investments," said ADB Principal Financial Sector Specialist Dongdong Zhang. "As the country starts to recover from the severe impacts of the coronavirus disease (COVID-19) pandemic, PPP will emerge as an important tool to leverage private sector resources to develop infrastructure and create jobs."

Bangladesh recorded strong economic growth in the recent decade with gross domestic product growing an average 7% per year. This has increased demand for energy, transportation, and urban infrastructure development projects.

The ADB assistance will help implement PPP infrastructure subprojects developed by government agencies. The financial intermediary loan will strengthen the capacity of the Bangladesh Infrastructure Finance Fund Limited (BIFFL), which has been established by the government to provide long-term local-currency debt financing to infrastructure projects. ADB has been a long-standing partner to support BIFFL to promote PPP program and develop its pipeline of projects. ADB has also assisted the government to develop the PPP Act and an institutional framework for PPPs in addition to supporting priority sectors of Bangladesh as a transaction advisor.

A $650,000 technical assistance grant from ADB's Financial Sector Development Partnership Special Fund will support BIFFL to review and update its corporate strategy, as well as assess and improve capacity to manage environmental and social safeguards and project implementation.