ADB's Work in Bangladesh

Exports, remittances, and domestic consumption buoyed Bangladesh’s economy in fiscal year (FY) 2022, which ended on 30 June 2022. Gross domestic product growth was at 7.1%, up from 6.9% in FY 2021. Growth, however, was dampened by the global economic slowdown caused by the Russian invasion of Ukraine, which affected Bangladesh’s economy through a widening external balance and rising inflation.

The Asian Development Bank (ADB) is a key source of external assistance for Bangladesh, providing $2 billion on average every year since 2016. ADB’s assistance is aligned with the country’s Eighth Five-Year Plan, 2021–2025 and the Perspective Plan, 2021–2041.

To date, ADB has committed 701 public sector loans, grants, and technical assistance totaling $28.3 billion to Bangladesh. Cumulative loan and grant disbursements to Bangladesh amount to $21.19 billion. These were financed by regular and concessional ordinary capital resources, the Asian Development Fund, and other special funds. ADB’s ongoing sovereign portfolio in Bangladesh includes 70 loans and 4 grants worth $11.31 billion.

ADB committed $1.6 billion in public sector loans and grants to Bangladesh in 2022. This included $250 million for social protection and $200 million in microenterprise financing for job creation to support recovery from the coronavirus disease (COVID-19) pandemic.

The $157-million Flood and Riverbank Erosion Risk Management Investment Program Tranche 2 will mitigate flood and riverbank erosion risks, strengthen climate resilience through structural and nonstructural interventions, and promote knowledge solutions for water resources management along the Jamuna, Padma, and Ganges rivers in central Bangladesh. The $140-million Dhaka Environmentally Sustainable Water Supply Project (additional financing) is improving access to and the quality of inclusive water supply services while promoting environmentally sustainable surface water supplies in Dhaka. The $250-million Coastal Towns Climate Resilience Project is strengthening climate and disaster resilience in 22 coastal towns in Bangladesh.

The $143-million SASEC Integrated Trade Facilitation Sector Development Program is improving the volume, efficiency, predictability, and security of cross-border trade in Bangladesh. The $71.4-million Emergency Assistance Project (additional financing) scaled up the ongoing project to address unmet basic infrastructure and the urgent needs of displaced people from Myanmar sheltered in Cox’s Bazar in Bangladesh. The $278.3-million Third Public–Private Infrastructure Development Facility (Tranche 2) is providing and catalyzing long-term financing for infrastructure development, reducing pressures on public finances, and enhancing value for money.

The $100-million Greater Dhaka Sustainable Urban Transport Project (additional financing) is contributing to the development of a 20.5-kilometer bus rapid transit corridor and related infrastructure to connect Gazipur, an industrial city in the north, to Dhaka’s international airport.

Nonsovereign operations. Total outstanding balances and undisbursed commitments of ADB’s nonsovereign transactions in Bangladesh as of 31 December 2022 was $910.16 million representing 7.1% of ADB’s total private sector portfolio.

Operational challenges. The COVID-19 pandemic and the Russian invasion of Ukraine slowed Bangladesh’s high economic growth that had been sustained over the past decade. To rally growth, ADB is supporting government efforts on strengthening public financial management and the social protection system. ADB is responding to Bangladesh’s need for greater climate resilience, quality education, improved infrastructure, and skills development to realize the government’s goal of becoming an upper middle-income country by 2031.

Second Primary Education Development Program (Sector Loan) in Bangladesh. Students of class two attend a class at the Akhborpur Government Primary School in Mowlovibazar. Photo: Abir Abdullah/ADB

ADB has been supporting Bangladesh with capacity development and reform measures for improving project implementation, which often suffer from delays. In 2022, ADB’s initiatives and policy dialogue focused on supporting government initiatives to increase this capacity; improve project readiness; strengthen financial management; and enhance the technical design of environment, land acquisition, and involuntary resettlement projects. ADB’s updated procurement policy and regulations help ensure faster procurement and consultant recruitment as well as simpler, more effective fiduciary systems across the project cycle. Under the country partnership strategy, 2021–2025, ADB sharpened its focus on climate and gender operations.

Knowledge Work

The 2022 study Gender Equality and Social Inclusion Diagnostic for the Financial Sector of Bangladesh examines the gaps in financial services that impede the achievement of gender equality and social inclusion in Bangladesh. The study on Northeast Bangladesh Economic Corridor Comprehensive Development prepared a holistic investment plan for the industrial and economic development of this region. Knowledge work and new ideas on gender, taka-linked bonds, urban water supply, sustainable and affordable housing, public–private partnerships, and economic issues were shared and disseminated among stakeholders in 2022.

  ADB Projects in Bangladesh Project data sheets for loans, grants, TAs

Future Directions

The current country partnership strategy supports Bangladesh’s efforts to achieve prosperity and inclusiveness by boosting competitiveness, employment, and private sector development; promoting green growth and climate resilience; and strengthening human capital and social protection. ADB, in helping the government achieve these priority objectives, will accelerate assistance for gender equality and social inclusion, strengthen institutional capacity and governance, deepen regional cooperation and integration, and promote new technology and innovation.

The country partnership strategy uses knowledge-driven multidisciplinary approaches with an enhanced focus on innovation and climate change management. The strategy has adopted knowledge solutions as a key driver to facilitate sustainable, resilient, and inclusive growth. It combines finance, knowledge, and partnership for preparing strategic economic, sectoral, and thematic analyses to inform sector policy reforms, drive transformative investments to address complex development challenges, and design future ADB investments. Over the strategy’s 2023–2025 period, ADB has a pipeline of 44 firm projects worth $9.5 billion and 34 standby projects worth $7.6 billion.

In 2023, ADB will support sustainable and resilient recovery from the COVID-19 pandemic and the external economic shock from the Russian invasion of Ukraine with a sharpened focus on public financial management, climate change, food security, skills development, rural development, water and sanitation, and the finance sector, among others. Technical assistance will emphasize innovation and promote new technologies.

Last updated: 28 April 2023