At the beginning of the current financial year, the foreign loan commitments collapsed. Only USD 2.01 crore was received as project funding and budget support commitments from development partners during July-August. The commitment was $1.14 billion during the same period last fiscal year.
According to the Economic Relations Department (ERD) updated report on Monday (September 30), foreign loan commitments in July and August of the current fiscal year have decreased by 98.2 percent compared to the same period of the previous fiscal year.
According to the ERD, the decision to review projects in the foreign loan pipeline has led to a major collapse in loan commitments to development partners in the first two months of the 2024-25 fiscal year, i.e. July-August.
In these two months, the previous Awami League government fell in a mass coup amid nationwide political unrest.
According to ERD, the current interim government is reviewing the loan agreement proposals made during the Awami League government. Due to this, loan agreements with development partners are not being completed. However, after the review, the proposed loan process will begin and the officials expect the commitments to be realized as per the target. After the formation of the interim government, multilateral and various bilateral development partners including the World Bank, Asian Development Bank (ADB) have given preliminary assurances of loans and budget support for various projects in Bangladesh.
Meanwhile, the interim government has initiated a review of all ongoing, proposed and under-discussion foreign-funded projects to identify priority projects and close those deemed unnecessary. As part of this, the ERD through a letter has already asked the project implementing agencies to submit a priority list with project rationale, feasibility and progress information by this month.
According to ERD sources, the list of foreign loans is being submitted from various ministries and departments. ERD will review these lists and send them to the Planning Commission.
The Planning Commission will then initiate the project approval process and ERD loan process on a priority basis.