DHAKA, May 22, 2011 - The Government of Bangladesh today signed a US$ 120 million credit agreement with the World Bank for the “Bangladesh Private Sector Development Support Project”. In partnership with the UK-Department for International Development (UK-DFID), the project will facilitate investment to set up Economic Zones for the emerging manufacturing and services sectors of the economy with the aim to create more jobs.
The Government’s new Economic Zone policy builds on results of the Export Processing Zones which began in the 1980s and today employ nearly 292,000 people. The World Bank Group has supported the Bangladesh Export Processing Zone Authority, both in terms of physical investment to create new zones as well as institutional strengthening. Economic zones provide supporting infrastructure and streamlined procedures for setting up and operating manufacturing and service industries. Zones have contributed to rapid growth of exports, worth US$2.9 billion last year. Extension of economic zones will accelerate growth to help Bangladesh reduce poverty from 40 percent to 15 percent by 2021.
“The project will address the lack of serviced land and quality infrastructure that hampers private sector development in Bangladesh,” said Ellen Goldstein, Country Director, World Bank Bangladesh. “It will also serve as a platform for a stronger integration between exporters and domestic suppliers.”
The project will support the government in establishing economic zones and provide financing for off-site and last mile infrastructure, starting with the Kaliakoir Hi-Tech Park. The project will also support firm level training and process development to enable better collaboration between enterprises in the economic zones and their suppliers.
"The Government of Bangladesh is committed to sustain high economic growth and generate employment opportunities for the people of Bangladesh,” said M. Musharraf Hossain Bhuiyan, Secretary, Economic Relations Department. “Economic Zones will also create increased linkages with the domestic economy by broadening and building on Bangladesh’s positive experience with Export Processing Zones.”
Mr. M. Musharraf Hossain Bhuiyan, Secretary, Economic Relations Division and Ms. Ellen Goldstein, Country Director, World Bank Bangladesh signed on behalf of the Government of Bangladesh and the World Bank respectively, at the Economic Relations Division.
The credit from the International Development Association (IDA), the World Bank’s concessional arm, has 40 years to maturity, including a 10-year grace period; and carries a service charge of 0.75 percent.
