Bangladesh: Second Capital Market Development Program

Sovereign Project | 43477-013

Summary

The program's impact will be a well functioning financial system that supports basic capital and investment needs, as well as Bangladesh's longer-term economic objectives. The program's outcome will be a deeper and more stable capital market. The program components include (i) strengthened market stability by enhancing SEC's role to develop the market, promoting financial stability through joint supervision of the financial system, strengthening regulatory measures, and developing a market surveillance system; (ii) enhanced market facilitation by developing a long-term vision for capital markets, upgrading accounting and auditing standards, expediting adjudication of enforcement actions, improving governance of listed companies, and pursuing demutualization of the stock exchanges; (iii) enhanced supply of equities and bonds; and (iv) enhanced demand for equity and debt securities.

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Project Name Second Capital Market Development Program
Project Number 43477-013
Country Bangladesh
Project Status Approved
Project Type / Modality of Assistance Loan
Technical Assistance
Source of Funding / Amount
Loan 2951-BAN: Second Capital Market Development Program
Ordinary capital resources US$ 95.00 million
Loan 2952-BAN: Second Capital Market Development Program
Asian Development Fund US$ 155.00 million
Loan 2953-BAN: Second Capital Market Development Program (ADF Hard Term)
Asian Development Fund US$ 50.00 million
TA 8228-BAN: Enhancing Efficiency of the Capital Market
Japan Fund for Poverty Reduction US$ 750,000.00
Strategic Agendas Inclusive economic growth
Drivers of Change Governance and capacity development
Private sector development
Sector / Subsector Finance - Money and capital markets
Gender Equity and Mainstreaming No gender elements
Description The program's impact will be a well functioning financial system that supports basic capital and investment needs, as well as Bangladesh's longer-term economic objectives. The program's outcome will be a deeper and more stable capital market. The program components include (i) strengthened market stability by enhancing SEC's role to develop the market, promoting financial stability through joint supervision of the financial system, strengthening regulatory measures, and developing a market surveillance system; (ii) enhanced market facilitation by developing a long-term vision for capital markets, upgrading accounting and auditing standards, expediting adjudication of enforcement actions, improving governance of listed companies, and pursuing demutualization of the stock exchanges; (iii) enhanced supply of equities and bonds; and (iv) enhanced demand for equity and debt securities.
Project Rationale and Linkage to Country/Regional Strategy ADB's financial sector strategy for Bangladesh, which is included in the new country partnership strategy and the new country operations business plan, is based on the Sixth Five-Year Plan, lessons from ADB's previous financial sector interventions, and coordination with other development partners. In line with the Sixth Five-Year Plan and ADB's Strategy 2020 priorities, capital market development and bond market development focusing on the provision of long-term infrastructure is one of ADB's focus areas in its Bangladesh public sector operations. Strategy 2020 includes support for capital market development as one of ADB's core operational priorities because it can facilitate private sector development and infrastructure development, which rely on the availability of long-term local currency funds for viable financial structures. The proposed program is fully aligned with the government's Sixth Five-Year Plan, ADB's Strategy 2020, and ADB's country partnership strategy with Bangladesh. ADB will provide assistance for capital market development in 2012 to complement and support the government's commitment to meaningful capital market reform.
Impact A well-functioning financial system that supports basic capital and investment needs as well as Bangladesh's longer-term economic objectives
Project Outcome
Description of Outcome A deeper and more stable capital market
Progress Toward Outcome
Implementation Progress
Description of Project Outputs

Strengthened market stability

Enhanced market facilitation

Enhanced supply measures

Enhanced demand measures

Status of Implementation Progress (Outputs, Activities, and Issues) Loan 2951-BAN has been closed with effect since 5 April 2013 as this loan was fully disbursed in 2012. The 2nd tranche disbursements of Loans 2952-BAN and 2953-BAN were released on 16 December 2014. These 2 loans were closed with effect from 18 December 2014.
Geographical Location
Safeguard Categories
Environment C
Involuntary Resettlement C
Indigenous Peoples C
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design
During Project Implementation
Responsible ADB Officer Vivek Rao
Responsible ADB Department South Asia Department
Responsible ADB Division Public Management, Financial Sector and Trade Division, SARD
Executing Agencies
Bank and Financial Institutions Division-MOFARIJIT@FINANCE.GOV.BDBangladesh Secretariat
Dhaka-1000 Bangladesh
Timetable
Concept Clearance 17 May 2011
Fact Finding 24 Jun 2012 to 02 Jul 2012
MRM 09 Aug 2012
Approval 28 Nov 2012
Last Review Mission -
Last PDS Update 09 Mar 2015

Loan 2951-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2012 29 Nov 2012 17 Dec 2012 30 Jun 2014 - 05 Apr 2013
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 95.00 Cumulative Contract Awards
ADB 95.00 28 Nov 2012 95.00 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Nov 2012 95.00 0.00 100%

Loan 2952-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2012 29 Nov 2012 17 Dec 2012 30 Jun 2014 31 Mar 2015 18 Dec 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 155.00 Cumulative Contract Awards
ADB 155.00 28 Nov 2012 150.25 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Nov 2012 150.25 0.00 100%

Loan 2953-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2012 29 Nov 2012 17 Dec 2012 30 Jun 2014 31 Mar 2015 18 Dec 2014
Financing Plan Loan Utilization
Total (Amount in US$ million) Date ADB Others Net Percentage
Project Cost 50.00 Cumulative Contract Awards
ADB 50.00 28 Nov 2012 49.53 0.00 100%
Counterpart 0.00 Cumulative Disbursements
Cofinancing 0.00 28 Nov 2012 49.53 0.00 100%

TA 8228-BAN

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
28 Nov 2012 06 Mar 2013 06 Mar 2013 31 Dec 2014 24 Jun 2015 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
0.00 750,000.00 0.00 0.00 0.00 0.00 750,000.00 28 Nov 2012 617,299.95

Safeguard Documents

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Evaluation Documents

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