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World Bank Approves $560M to Improve Sustainability in Bangladesh

Bangladesh has long struggled with infrastructure problems and a fresh injection of funds from the World Bank could help improve that situation.

The World Bank has approved $560 million in funding for two projects in Bangladesh–one to help micro enterprises, including leather and textiles, become environmentally sustainable, and the other improve a reliable power supply.

“The World Bank is helping Bangladesh overcome barriers to higher growth. Unreliable power supply and environmentally-unstainable enterprises hinder country’s competitiveness and poverty reduction efforts,” Zahid Hussain, World Bank acting country director for Bangladesh, said. “By improving electricity transmission and helping micro-enterprises adopt environment-friendly technologies, these projects will help Bangladesh achieve sustainable growth and advance towards upper middle-income country vision.”

The $110 million Sustainable Enterprise Project (SEP) will help 20,000 microenterprises adopt environmentally-friendly practices. The project covers manufacturing and agribusiness sectors, including leather, textiles, light engineering, plastic, food processing, metal products, livestock, horticulture, aquaculture and poultry.

“Half the country’s population depend on microenterprises for livelihoods. But, the microenterprises cumulatively affect the environment and face climate change risks,” said Nadia Sharmin, World Bank task team leader. “By creating opportunities for them to avail finance and technologies for environmentally sustainable practices, the project will promote a cleaner and climate-resilient economy.”

The project will encourage microenterprise clusters to use cleaner technologies and joint amenities such as shared recycling or storage facilities by offering incentives to do so. It will also provide loans for innovative technologies and practices aimed at improving the country’s environment.

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The $450 million Enhancement and Strengthening of Power Transmission Network in Eastern Region Project (ESPTNERP) will expand the electricity transmission network in the eastern region, covering greater Comilla and Noakhali, and part of greater Chittagong. The aim is to provide new electricity connections to 275,000 households and 16,000 agricultural consumers and reduce power interruptions. The project will expand the existing grid network by building 13 new substations and rehabilitating an existing one.

“In the last decade, Bangladesh has increased power generation capacity by more than three-fold…but it still has one of the world’s lowest electricity consumption rate per person,” Mohammad Anis, a World Bank task team leader, said.

The funding is provided through interest-free credits from the World Bank’s International Development Association. The World Bank noted that it was among the first development partners to support Bangladesh following its independence. Since then, the World Bank has committed nearly $28 billion in grants and interest-free credits to Bangladesh.

In November, the World Bank provided $357 million in funding to improve infrastructure and obtain long-term financing for industries ranging from container terminals to the garment industry.

This included fund for an Investment Promotion and Financing Facility Project aimed at increasing long-term financing for infrastructure and capacity building in container terminals, land ports, roads and bridges, as well as power and energy, information and communication technology, waste management, water treatment and energy saving equipment.

It also involved $100 million toward an Export Competitiveness for Jobs Project that promised to help create 90,000 jobs by helping firms access international markets, overcome technology, infrastructure and skills shortfalls, plus enable those in the garment industry in Bangladesh to comply with international quality standards.