Both the disbursement and commitment of foreign aid have increased in Bangladesh in the first seven months of the current fiscal year thanks to the rapid release of funds and additional pledges of support in the fight against the pandemic.
Meanwhile, the use of foreign aid rose 28.42 percent year-on-year to $4.7 billion, according to data from the Economic Relations Division (ERD).
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The Asian Development Bank (AfDB) tops the list of fund disbursements with $1.7 billion.
A finance ministry official said the Manila-based development lender had already disbursed around $1 billion in Covid-19 aid. In addition, it has almost disbursed all of its budget support for this fiscal year.
Japan became the second largest provider of financial support with over $1 billion during this period.
DRE officials say a number of Japan-funded megaprojects, including the Dhaka rail metro project, were going full steam ahead after the easing of pandemic-related restrictions.
A good amount of funds have been disbursed by the World Bank to support efforts to fight the pandemic along with regular loans.
The Washington-based multilateral lender has provided $500 million for the purchase of Covid-19 vaccines.
According to officials, the World Bank fund was not used much initially. But it recently resumed and the government has spent $130 million as part of Covid-19 support.
Bangladesh has set an ambitious target of receiving $12.98 billion in foreign aid from development partners in the current fiscal year.
But the ERD could reduce the allocation target by $1.5 billion in the revised budget, as the use of funds has been lower than expected.
Bangladesh spent between 3 and 3.5 billion dollars per year between 2013-2014 and 2016-2017. Spending of foreign funds has exceeded $7 billion per year since the 2018-19 fiscal year.
Commitment from development partners also increased by 47.55% year-on-year over the past seven months to $4.69 billion.
When a loan agreement is signed with a development partner, it is considered a commitment, meaning the fund is ready for use.
The government has set a goal of achieving $6 billion in foreign aid commitments this fiscal year.
An ERD official said he has agreements in the works that would be signed by June 2022. Once inked, the foreign aid commitment will exceed the target figure.
China made the highest commitment with $1.3 billion, followed by the AfDB with $822 million and the World Bank with $795 million.
Over the past seven months, Bangladesh has paid off its debt amounting to $900 million, down 26% from a year ago.