Finance minister AMA Muhith on Tuesday said the government has almost completed negotiations with the World Bank for US$ 500 million under a fresh loan deal for budgetary support.
Talking to reporters at his secretariat office, he said the government has refused to renew the IMF sponsored Extended Credit Facility loan deal as it would have no financial benefit.
The IMF wanted to extend the ECF without offering further credit, he said after a meeting with the visiting IMF officials.
‘Why should we extend the programme with IMF without any financial benefit,’ he said while clearing the stand of the government.
Muhith said they had already completed negotiation with the WB to strike a deal on the budgetary support worth US$ 500 million.
He said the deal would be signed in the current fiscal year, but disbursement of the installments would start from the next fiscal year.
He said major portion of the budgetary support would be spent for reforming local government.
He refused to disclose if other areas, such as banks, were under reform scanner.
This would be the first budgetary support from the WB after an interval of at least seven years. Meanwhile, a handsome amount of credit for the Padma Bridge project worth US$ 1.2 billion was cancelled in 2012 on corruption allegations in tender bidding.
The government has been looking for budgetary support from the WB since 2011 but could not reach a consensus on many issues with the country’s single biggest multilateral donor.
Muhith observed that refusal to extend the ECF would not create any problem to receive the last two instalments under the US$ 1 billion worth ECF deal that will expire early next year.
The IMF will disburse the last tranches timely, he hoped.
The government entered the ECF agreement with the IMF in April 2012. The ECF carries zero interest and the repayment period is 10 years.
-With New Age input
