World Bank Approves $111.5 Million Credit for Accountable Local Governance in Bangladesh

Strategic Insights -

The World Bank has approved a $111.5 million credit to support the government's program to develop an accountable local governance system in Bangladesh. The credit will strengthen Union Parishads' (UPs) ability to respond to community needs and deliver services through a transparent fiscal transfer system. The Local Governance Support Project (LGSP) will focus on capacity building in UPs, particularly regarding financial management and procurement, in its first year. The project will increase equitable distribution of financial resources to UPs, strengthen local governments' ability to respond to community development priorities, and build the capacity of UPs to undertake strategic planning and design, and to manage scheme implementation.

Key Takeaways:

  • The World Bank approved a $111.5 million credit to support the government's program to develop an accountable local governance system in Bangladesh.
  • The credit will strengthen Union Parishads' (UPs) ability to respond to community needs and deliver services through a transparent fiscal transfer system.
  • The Local Governance Support Project (LGSP) will focus on capacity building in UPs, particularly regarding financial management and procurement, in its first year.
  • The project will increase equitable distribution of financial resources to UPs, focusing on 15 Union Parishads.
  • The credit from the International Development Association (IDA) has a 40-year maturity with a 10-year grace period and a service charge of 0.75 percent.
  • Christine Wallich, World Bank Country Director for Bangladesh, noted that expanding the block grant program provides an important opportunity to strengthen local governments, promoting broader political participation and greater accountability of the state to citizens.
  • The project draws on the government's own framework and pilots such as the Sirajganj Local Government Development Project and Tangail Rural Development Project.
  • The United Nations Capital Development Fund (UNCDF), United Nations Development Program (UNDP) and the European Union (EU) will contribute an additional $16 million for second-generation pilots.

Statistics:

  • $111.5 million: The amount of the World Bank credit approved for the Local Governance Support Project.
  • 40 years: The maturity period of the credit from the International Development Association (IDA).
  • 10 years: The grace period of the credit from the International Development Association (IDA).
  • 0.75 percent: The service charge on the credit from the International Development Association (IDA).
  • 15: The number of Union Parishads involved in the safety net program for the rural poor.

Sources:

  • World Bank press release
  • United Nations Capital Development Fund (UNCDF) statement
  • Bangladesh News (UNB) article