The Asian Development Bank (ADB) and the Government of Bangladesh have signed a $600 million policy-based loan (PBL) agreement aimed at driving structural reforms to enhance domestic resource mobilisation, improve public investment efficiency, foster private sector development, reform state-owned enterprises (SOEs), and promote transparency and good governance.
The agreement was signed by Md. Shahriar Kader Siddiky, Secretary of the Economic Relations Division (ERD), and Jiangbo Ning, Deputy Country Director of ADB, at a ceremony held at the ERD office in Dhaka.
“This $600 million assistance under the Strengthening Economic Management and Governance Program (Subprogram 1) addresses structural weaknesses in mobilising resources, improving the investment climate, facilitating trade and logistics, and fostering transparency and governance,” said Jiangbo Ning.
He added that the programme targets a 25% increase in income tax revenue, a 30% rise in value-added tax (VAT), and significant reductions in project cost overruns (by 30%) and average time overruns for completed projects to 18 months by March 2027.
The Strengthening Economic Management and Governance Program includes two subprograms. Subprogram 1 focuses on initiating reforms such as rationalizing tax expenditure, automating tax administration, enhancing data transparency, improving public investment management systems, and strengthening SOE governance. Additionally, it aims to streamline regulations and facilitate trade.
Subprogram 2, scheduled for 2026, will build on these reforms, with another $600 million in funding to deepen progress made in fiscal management, SOE governance, and trade policy. The program also aims to foster a “whole-of-government” logistics sector reform to lower trade costs and promote export diversification.
ADB, established in 1966 and owned by 69 member countries, remains committed to achieving a prosperous, inclusive, resilient, and sustainable Asia-Pacific region while striving to eradicate extreme poverty.
