World Bank to provide US$120m for climate smart agriculture, deal signed

Bangladesh’s government and the World Bank signed a finance agreement today, under which the lending institution will give US$120 million for the implementation of the “Climate Smart Agriculture and Water Management” project.

Fatima Yasmin, Secretary of the Economic Relations Division (ERD), and Dandan Chen, Acting World Bank Country Director, signed the agreement on behalf of their respective parties.

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The Bangladesh Water Development Board (BWDB) under the Ministry of Water Resources, the Department of Agricultural Extension (DAE) under the Ministry of Agriculture, and the Directorate of Fisheries (DoF) under the Ministry of Fisheries and Livestock will work together to complete the project by June 2026.

According to an ERD news statement, the BWDB will receive US$100 million of the overall loan amount of US$120 million, with the DAE and DoF receiving US$10 million each.

The loan will be provided by the World Bank through the IDA19 Scale-up Window (SUW).

The interest rate is Reference rate + Fixed Spread, with a one-time front-end fee of 0.25 percent of the credit amount and a commitment charge of 0.25 percent per year on the credit balance that has not been released. The funding will have a 35-year maturity duration, with a five-year grace period.

The loan will be used to repair and update flood control drainage and flood control drainage irrigation infrastructures in order to manage climate-resilient water resources.

To encourage the efficient use of water resources on farms and the use of climate-smart agricultural methods in both crop and fishery production systems.

Furthermore, through at least 12 climate smart technologies in the project region, the project will increase agricultural production and save roughly 50% irrigation water on the crop field. By implementing climate smart aquaculture technology, it will also enhance fish production and productivity by 20%.

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