The Government has signed a US$ 137.60 million credit deal with the World Bank for the Bangladesh Private Sector Development Support Project (PSDSP).

Economic Relations Division (ERD) Secretary M Musharraf Hossain Bhuiyan and World Bank Country Director Ellen Goldstein put the pen on the agreement at NEC-II conference room in city’s Sher-e-Bangla Nagar on Sunday.

Under the agreement, the World Bank will provide US$ 120 million as soft loan while the Department for International Development (DFID) of the UK would provide U$ 17.60 million as grant to Bangladesh for the PSDSP. DFID will provide the grant through World Bank.

In partnership with the UK-DFID, the project will facilitate investment to set up special economic zones for the emerging manufacturing and services sectors of the economy with the aim to create more jobs.

WB country director Ellen Goldstein said the project will address the lack of serviced land and quality infrastructure that hampers private sector development in Bangladesh.

“It will also serve as a platform for a stronger integration between exporters and domestic suppliers,” she said.

ERD secretary M Musharraf Hossain Bhuiyan said economic Zones will create increased linkages with the domestic economy by broadening country’s of operating Export Processing Zones.

The government’s new Economic Zone policy is built on the success of its EPZs which began in the 1980s that today employs nearly 292,000 people.

The World Bank Group has supported the Bangladesh Export Processing Zone Authority, both in terms of physical investment to create new zones as well as institutional strengthening.

Economic zones would support infrastructure to the manufacturing sector and streamline the procedures for setting up and operating manufacturing and service industries. EPZs have contributed to rapid growth of exports worth US$2.9 billion last year, ERD sources said.

Setting up of economic zones will accelerate economic growth to help Bangladesh reduce poverty from 40 percent to 15 percent by 2021, the source added.

The WB supported project will support the government in establishing economic zones and provide financing for off-site infrastructure, starting with the Kaliakoir Hi-Tech Park.

The credit from the International Development Association (IDA), the World Bank’s concessional arm, has 40 years term to mature, including a 10-year grace period; and carries a service charge of 0.75 percent.

News: Daily Sun/ Bangladesh/ May-23-2011