Use of foreign aid rises, but may miss target

Although foreign assistance disbursement is increasing continuously, the country is still behind its target for this fiscal year. 

Bangladesh earlier set an ambitious target to receive $12.98 billion in foreign assistance from development partners in the current fiscal year. Later the target was revised to $11 billion.

Development partners disbursed $8.4 billion in the 11 months of the current fiscal year, a 47 per cent increase year-on-year, according to data from the Economic Relations Division (ERD).

According to the ERD officials, the government used these loans for vaccination, as one-time budgetary support and implementation of mega projects during the period.

Of the $8.4 billion, development partners disbursed $188 million as grant and the rest as loan. During the period, $1.89 billion has been repaid with interest.

Despite the SWIFT ban on Russian banks and having no prior commitment, Russia is providing the fourth largest loan amounting to $1.15 billion.

The majority is for the Rooppur nuclear power plant which is estimated to cost Tk 113,092 crore.

Around Tk 52,575 crore (46 per cent) has been spent till May this fiscal year, according to finance ministry data. The power plant is expected to start operations in December 2025.

The project became mired in uncertainty following Russia's invasion of Ukraine and the resulting Western sanctions against Russia.

Asian Development Bank topped the fund disbursement list with $2.07 billion.

With the funding, the government is conducting the Covid-19 vaccination.

The country has already provided the second dose of the vaccination to 69 per cent of the population.

Over 12 crore people have been administered the first dose, as of the latest data of the Directorate General of Health Services.

Besides, the government has disbursed budgetary support for this fiscal year from the allocation, said finance ministry officials.

Japan has become the second biggest financial support provider with $1.7 billion.

The ERD officials say several mega projects funded by Japan, including that of the Dhaka metro rail, Matarbari port and coal-fired power project, are being implemented in full swing.

Though Japan cancelled the funding for the Matarbari coal-fired power plant's second phase on Wednesday, it is providing funding for the ongoing one. The Tk 51,851 crore project has witnessed 46 per cent of the money being spent till last May.

Some 83 per cent of the money allotted for the Japan-funded Dhaka Mass Rapid Transit Development Project Line-6 or metro rail project has been spent during the period, according to the ERD data.

The third highest lender is the World Bank, which disbursed $1.53 billion.

A good amount of funds has been disbursed by the World Bank to support efforts aimed at tackling the pandemic along with regular loans.