Disbursement of foreign aid up 58% in 10 months

Disbursement of foreign aid jumped 58% in the July-April period of the current fiscal year thanks to immunization expenditures, one-time budget support and the implementation of mega-projects, including that of the Russian-funded Rooppur nuclear power plant.

Development partners disbursed $7.71 billion, up from $4.86 billion in the previous fiscal year, according to data from the Economic Relations Division (ERD).

It is the strongest growth since fiscal 2017-18, when it jumped 74% year-on-year to $6.1 billion, according to data compiled by Bangladesh Bank.

Despite the SWIFT ban, Russia provided the fourth largest loan, $1.05 billion, the majority of which was spent on the Rooppur plant.

The Rooppur plant will cost Tk 113,092 crore while Tk 51,292 crore has been spent till April of this financial year.

The project is about 46% complete in April, the best performance posted among megaprojects this year. Progress has been on schedule with the first unit opening by 2024 and the second unit by 2025.

The project had been mired in uncertainty after Russia’s invasion of Ukraine and the resulting Western sanctions against Russia.

The project is being built under a build and finance agreement with Russia’s state agency Rosatom, which is responsible for 76% of global nuclear technology exports.

No funds come from Russia but equipment and technology, the values ​​of which are counted as expenses for the establishment of the nuclear power plant.

The Asian Development Bank (AfDB) tops the list of fund disbursements with $1.99 billion.

A finance ministry official said the Manila-based development lender had already disbursed around $1 billion in aid for the Covid-19 vaccination.

In addition, it has disbursed almost all of its budget support for this fiscal year, which has resulted in an increase in the total amount.

Japan became the second largest provider of financial support with $1.7 billion.

DRE officials say several Japanese-funded megaprojects, including the Dhaka Metro, Matarbari Port and Coal Power Project, are being implemented in full swing following the easing of restrictions on coronaviruses.

The third largest lender is the World Bank, which disbursed $1.16 billion.

A fair amount of funds have been disbursed by the World Bank to support efforts to fight the pandemic, along with regular loans.

According to officials, the World Bank fund was not used much initially. But it recently resumed and the government spent the majority of the funds on Covid-19 support.

Bangladesh has set an ambitious target of receiving $12.98 billion in foreign aid from development partners in the current fiscal year.

But the ERD could reduce the allocation target by $1.5 billion in the revised budget, as the use of funds has been lower than expected. Bangladesh spent between 3 and 3.5 billion dollars per year between 2013-2014 and 2016-2017.

Spending of foreign funds has exceeded $7 billion per year since the 2018-2019 fiscal year.

Meanwhile, the amount of aid pledged by development partners rose 11 percent year-on-year to $5.89 billion at the end of April.

In addition, principal and interest repayments of foreign borrowings are also increasing. From July to April of this year, $1.75 billion was repaid. This time last year it was $1.6 billion.

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