FHM Humayan Kabir

The Islamic Development Bank is likely to provide US$1.6 billion for Bangladesh's development and reduce poverty in four years until 2016, officials said Saturday.

Economic Relations Division (ERD) officials said the Jeddah-based lender IDB is working with them to finalise a Member Country Partnership Strategy (MCPS) to offer the financial support to Bangladesh.

"The strategy is likely to be finalised within this month. If it is done the IDB will provide the billion-dollar plus assistance for developing different sectors of the country," additional secretary of ERD Kazi Shofiqul Azam said.

IDB's support to energy, infrastructure, and human resources development will get priority in the four-year MCPS from 2013 to 2016, he told the FE.

"The IDB is also interested to support health sector development. But we are not interested in this field as other big donors like World Bank, Asian Development Bank are already helping," Mr Azam said.

We have requested the IDB to support railway and road infrastructure development and also projects ubder public private partnership (PPP), he added.

IDB is one of the Bangladesh's key development partners which provides nearly $100 million to $150 million on an average every year for the development of infrastructure and poverty reduction.

Besides, the Jeddah-based agency provides nearly $800 million worth of credit annually out of its lending arm -- the Islamic Trade Financing Corporation for importing oil.

In the last calendar year 2012, the loan for the oil purchase picked up to more than $1.50 billion since the country's petroleum demand has surged enormously.

Another ERD official said the IDB is now preparing the four-year lending strategy where it will enhance the yearly disbursement as it has proposed $1.2 billion worth of aid for the public sector.

In addition, it will provide $400 million credit to the PPP schemes, he added.

The official said the IDB's loans will be mixed credit as some will be provided from its soft window, and some of them from the comparatively hard window.

"The ERD has scrutinised the four-year MCPS of the IDB and sent it to the finance minister for approval. If the minister approves then we will send it to the IDB headquarters for finalising the lending programme," he added.

If the IDB approves the strategy then we will sign an agreement to implement the MCPS in four years, he added.