ADB’s focus on climate resilience, energy efficiency, and sustainable transport aligns with Bangladesh’s goals.
The Asian Development Bank (ADB) has been a key player in Bangladesh’s socioeconomic advancement since their collaboration began in 1973. Their consistent funding and strategic partnerships have led to significant progress in many sectors. Notably, the country has witnessed substantial GDP growth, a decline in poverty rates, and improvements in critical areas such as energy, transportation, and education. ADB’s commitment to core priorities, including climate resilience, ensures sustainable development and resilience against challenges like the COVID-19 pandemic. Overall, ADB’s support remains instrumental in shaping Bangladesh’s economic landscape and enhancing the well-being of its citizens.
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Prime Minister Sheikh Hasina recently called for increased support from the Asian Development Bank to accelerate Bangladesh’s socioeconomic development efforts. Emphasizing the government’s focus on people’s socioeconomic progress and inclusive growth, the Prime Minister highlighted a special emphasis on rural development. Sheikh Hasina stressed the importance of boosting the purchasing power of the population to drive industrialization and create more employment opportunities. Seeking ADB’s assistance in key sectors such as climate change adaptation, agriculture, and river restoration, she urged the bank to prioritize people-centric projects to benefit a larger segment of the population.
ADB’s Commitment and Focus Areas
Fatima Yasmin reiterated that Bangladesh holds a top priority status for the ADB, with support increasing significantly from 2009 to 2023, reaching $3.4 billion. The ADB Vice-President expressed the organization’s interest in implementing projects related to river restoration, river-based tourism, recreation centers, and irrigation, aligning with priorities in climate change adaptation, human and social development, technical education, and healthcare sectors. The ADB’s dedication to people-centric projects and sustainable initiatives underscores its commitment to furthering Bangladesh’s development goals and enhancing the well-being of its citizens.
ADB’s $400M Boost to Bangladesh’s Climate Adaptation
The Asian Development Bank (ADB) approved a $400 million policy-based loan for Bangladesh to enhance its climate resilience efforts. This funding supported Bangladesh’s National Adaptation Plan and its commitments under the Paris Agreement. Given Bangladesh’s vulnerability to climate change, with annual losses averaging $3 billion, this loan played a vital role in the $700 million Climate-Resilient Inclusive Development Program. The program aimed to boost climate resilience, facilitate a transition to a low-carbon economy, reduce greenhouse gas emissions, and integrate gender equality and social inclusion in climate initiatives.
The program’s objectives included mobilizing climate finance, prioritizing climate actions in development, and implementing reforms in key sectors. It established the National Committee for Environment and Climate Change and supported the Bangladesh Climate and Development Partnership. By promoting climate-smart agriculture, solar irrigation, resilient infrastructure, and regulations for electric vehicles, the program aligned with ADB’s commitment to providing $100 billion in climate financing to member countries between 2019 and 2030.
Top projects with highest allocations
According to the Planning Commission, the upcoming annual development program (ADP) has designated Tk60,053 crore, or approximately 23% of the total allocations, for the top few initiatives in the fiscal year 2023-24.
ADB’s ongoing portfolio in Bangladesh
As of August 31st, of the current year, the Asian Development Bank’s (ADB) active portfolio in Bangladesh amounts to $13.01 billion, spread across 53 projects spanning six sectors. These sectors include agriculture, food, nature, and rural development with seven projects, human and social development with 11 projects, energy with seven projects, transport with 12 projects, water and urban development with 10 projects, and finance, public sector management, and governance with six projects. Notably, the transport and human and social development sectors together account for 45.7% of the total portfolio.
2023 portfolio performance
The portfolio performance for 2023 shows notable improvements compared to the previous year. As of August 31st, both contract awards and disbursements have surpassed their corresponding targets set for the year. Contract awards reached $793.18 million, achieving 73.7% of the annual target of $1,076 million, while disbursements reached $940.44 million, representing 66.5% of the annual target of $1,414.1 million. In contrast, in 2022, these achievements were at 52% and 58% respectively. The Asian Development Bank (ADB) report indicates an overall enhancement in progress throughout 2023.
Fostering Sustainable Development
The Asian Development Bank (ADB) has been a steadfast partner in Bangladesh’s pursuit of progress and resilience. With a commitment to provide an estimated $9.4 billion loan over the next three years, ADB aims to bolster the country’s post-pandemic recovery and address global uncertainties.
1. Steady Financial Support:
Under the Bangladesh Lending Pipeline 2023-2025, ADB will allocate more than $3 billion annually to support critical projects. This substantial funding ensures continuity in development efforts.
In the previous pipeline (2022-2024), ADB proposed a lending amount of $7.91 billion, reflecting its unwavering commitment to Bangladesh’s growth.
2. Strategic Project Focus:
ADB’s loans will fuel projects across various sectors, impacting millions of lives. The bank has identified 44 confirmed projects through consultations with government agencies.
Infrastructure Development: Roads, railways, and necessary reforms will enhance inter-regional trade, market access, job opportunities, and private sector investments.
Climate Solutions: ADB integrates climate change mitigation and adaptation. Clean energy exploration, mass rapid transit, and e-vehicle development are key components.
3. Sectoral Priorities:
Transport: The highest allocation of $2.9 billion will boost transportation infrastructure, ensuring efficient connectivity.
Education and Health: ADB’s $2.35 billion commitment will enhance education and healthcare services.
Water and Urban Development: $1.39 billion will support sustainable urban growth.
Finance: ADB’s $1.3 billion investment will strengthen financial systems.
Energy: $1.07 billion will drive clean energy initiatives.
Agriculture: $441 million will promote agricultural development.
4. Resilience and Progress:
ADB’s focus on climate resilience, energy efficiency, and sustainable transport aligns with Bangladesh’s long-term goals.
Amid the pandemic, ADB swiftly adapted, allocating funds for healthcare infrastructure and vaccine procurement.
Project Success Rates and Timely Closure
Over the past five years, the project success rate has averaged at 68%, aligning with the regional average but falling short of the ADB’s corporate goal of 80%. However, there’s a positive trend in the three-year rolling project success rate, climbing from 61% in 2020 to 77% in 2022. All five projects under evaluation in 2023 are anticipated to achieve a successful rating.
ADB Project Success Trend in Bangladesh
- Average Success Rate (2018–2022): 68%1
- ADB’s Target Success Rate: 80%
Key Observations:
Positive Trend:
- In 2020, the project success rate started at 61%.
- By 2022, it steadily rose to an impressive 77%.
The Financial Management Project Performance Rating for ADB-supported projects in Bangladesh stands at a satisfactory level. Among the evaluated projects, 91% (41 projects) are deemed “on track,” while 9% (4 projects) require further attention.
Conclusion
ADB’s fund plays a crucial role in Bangladesh’s socioeconomic development, driving progress across various sectors and enhancing the well-being of its citizens. As the partnership between ADB and Bangladesh continues to strengthen, the future holds promise for further advancements and resilience against emerging challenges.
