Government officials gear up for getting released foreign aid already committed by "development partners" for bankrolling different projects, but held back, as confirmation of budget supports is delayed, officials said.
The Ministry of Finance (MoF) has asked the Economic Relations Division (ERD) to work on ways of availing the overseas funds stuck in the pipeline, discussing with the development partners, for minimising income-expenditure gap in the national budget, they said Friday.
"We have been trying to mobilize funds already confirmed by the development partners but yet to be disbursed. If those funds, especially the programme loans, are released, our government exchequer will enlarge," a senior ERD official told the FE.
"Actually, we are trying to work for quick disbursement of the disbursement-linked indicators (DLI) and reform agenda-based programme loans against different projects and programmes," he added.
The ERD secretary recently directed her officials to coordinate between project-implementing agencies and the development partners in a bid to get the funds directly, said an ERD official.
Meanwhile, the Finance Secretary called upon the ERD to get released the foreign assistance, amid fund shortage in the national budget for extra spending in the crisis time.
The government from the very beginning of the current FY2023 had searched budget support from the World Bank, the ADB, JICA and other development financiers as its budget deficit is expected to widen for higher subsidy payments amid local and global inflation onslaughts.
Dhaka requested the WB, Japan and the ADB to confirm at least $500 million each as budget support, and other development partners as much as they can.
The country's budget deficit (excluding grants) for the current fiscal year (FY) 2022-23 is estimated Tk 2.45 trillion, 5.51 per cent of total Gross Domestic Product (GDP).
Another ERD official said: "The development partners had already confirmed some foreign aid through signing loan deals which are in the pipeline for disbursement. We are going to work on those external funds."
Usually, the bilateral and multilateral development financiers disburse their committed assistance directly or indirectly against different projects and programmes. When the public-sector project- implementing agencies or the government fulfills certain reforms or DLI, set by the donors, then they disburse funds directly into government exchequer. Other committed credits are disbursed after completion of a certain portion of the development-project works.
"We are trying to get release of those loans which are DLI-based or related to reforms," the ERD senior official said.
According to ERD officials, they are trying to released some of funds from the World Bank's US$700 million-funded Primary Education Development Programme (PEDP)-4, $500 million-funded Electricity Distribution Modernization Program of REB, $100 million-funded Public Financial Management project, $425 million-funded Support to rural bridges and $125 million-funded Secondary Education Development Programme (SEDP).
Besides, the ERD is also trying to get the ADB-funded project and programme loans for different projects, including the PEDP, SEDP, and HPNSP.
"We are also trying to release some programme and project loans from other development partners, including AIIB, JICA, IDB and others," said the ERD official.
