Bangladesh has officially requested $6 billion in budget support from four major international lenders to address its mounting import bills, stabilize foreign exchange reserves, and rejuvenate the economy. The government hopes to secure these loans by December, according to finance ministry officials.
Finance Secretary Md Khairuzzaman Mozumder confirmed that Bangladesh has requested $1 billion each from the World Bank, Asian Development Bank (ADB), and Japan International Cooperation Agency (JICA). Additionally, the government is seeking $3 billion from the International Monetary Fund (IMF).
“Official letters have been sent to these organizations, and formal discussions will begin soon,” Mozumder told reporters. The finance ministry submitted the proposals following verbal negotiations, with formal talks expected shortly.
Due to a shortage of foreign currency, Bangladesh has been struggling to pay for essential imports like electricity, fuel, and fertilizers. The government is also grappling with outstanding bills from various agencies. To address these issues, $2 billion of the requested loans from the World Bank and ADB will be used to cover overdue payments for electricity, gas, and fuel oil imports, which stand at $2.2 billion.
The $1 billion loan from the World Bank will be discussed during a visit by World Bank Vice President Martin Raiser to Dhaka this month. The expected conditions for this budget support could include the withdrawal of subsidies on electricity and gas, along with the finalization of a new power sector master plan.
Bangladesh has also requested an additional $3 billion from the IMF, in addition to the $4.7 billion loan agreement signed in January 2023. Bangladesh has already received $2.3 billion in three installments from the IMF under this deal. With Pakistan recently securing a $7 billion bailout from the IMF, Bangladesh is optimistic about obtaining further support.
Formal negotiations are expected to start soon, as the government works towards stabilizing its economic situation.