The Asian Development Bank (ADB) will establish a trust fund to promote and integrate high-level technology (HLT) to implement its projects for Asia and the Pacific.

The HLT Fund will in operation by July. Japan will be the first donor of the fund, reports BSS on Saturday citing an ADB release. 

The fund will give grants for technical assistance projects, investment projects, and recruitment of technology experts to promote the integration of HLT and innovative solutions to identify and implement ADB-financed and administered sovereign and non-sovereign projects. 

It will encourage adoption of HLT on a bigger scale to address development challenges in ADB's developing member countries.

ADB intends to enhance its use of HLT in areas such as climate change, smart grids, mass energy storage, energy efficiency, renewable energy, toll/ticketing systems, intelligent transport systems, mass transit, smart cities, waste-to-energy technology, desalination, and remote sensing technology. 

"Enhancing the quality of infrastructure is important in realising sustainable economic growth. Japan welcomes and supports ADB's initiative to incorporate advanced technologies into projects." said Taro Aso, Japan's Deputy Prime Minister and ADB Governor.

Aso said it in his speech during the opening session of the 50th Annual Meeting of ADB's Board of Governors in Yokohama. 

"Japan has been promoting quality infrastructure in Asia, collaborating closely with ADB. To further strengthen the partnership, Japan will provide $40 million over 2 years to the new trust fund for HLT," he added. 

ADB President Takehiko Nakao said, "Many developing member countries find it challenging to introduce HLT in their countries due to lack of resources and limited institutional experience". 

"ADB appreciates Japan's support in the establishment of the much needed HLT Fund. This will pave the way for promoting more advanced and cleaner technology in our operations," he added.

A new procurement framework, approved by the ADB Board of Directors on 12 April, will place more weight on quality and help promote HLT facilities in ADB-financed projects.

Asian Development Bank (ADB) has improved its performance in loan disbursement in the year 2016, according to the latest version of the regional bank's report on its aid effectiveness.

The report titled '2016 Development Effectiveness Review' was released at the 50th Annual Meeting of ADB's Board of Governors in Japan's port city of Yokohama.

It showed that Bangladesh, China, India, Pakistan, and Viet Nam accounted for 66 per cent of all sovereign project and result-based lending disbursements in the last year.

"Bangladesh had the highest disbursement ratio, 23.4 per cent, of the top five countries with disbursements of $823 million," it mentioned.

The disbursement ratio means the ADB's actual disbursed amount against its lending target.

Finance Minister AMA Muhith, however, expressed his disappointment over the poor utilisation of aid in the country.

"Bangladesh is the star performer of the ADB loan utilisation, but we have a huge amount in the pipeline," he said, while talking to journalists in Yokohama after a meeting with the SAARC finance ministers.

"We have to improve our aid utilisation capacity," he added.

The ADB attributed the better performance in Bangladesh to a concerted effort by the staff of ADB's South Asia Department, including the Bangladesh Resident Mission.

The department and resident mission successfully "pursue potential disbursements and advance actions, realise additional disbursements from 2016 contract awards through timely mobilisation of advances, and execute loan savings effectively."

The report measured how good ADB was executing its corporate strategies and strategic priorities of the mid-term review of the strategy across 91 results indicators.

Commenting on the report, director general of the ADB's Strategy and Policy Department Indu Bhushan said: "ADB will continue streamlining its operations so that it can deliver development solutions more quickly and effectively, while continuing to scale up finance for the region."

Of the top five members on loan disbursement, India accounted for a record $1.38 billion, with a disbursement ratio of 18.2 per cent.

It was followed by China ($1.31 billion, and a disbursement ratio of 19.7per cent) and Pakistan ($838 million with the disbursement ratio 19.6 per cent).

Viet Nam had the lowest ratio of the five (13.8%) with disbursement of $707 million, partly because of the government limits on disbursements from projects funded by official development assistance.

ADB approved $17.5 billion in financing in 2016 from its own resources and attracted $13.9 billion in co-financing -- both are new highs. The bank also disbursed $12.48 billion, which is another record.

"The overall improvement in the sovereign project and RBL disbursement performance during 2016 was achieved through concentrated efforts by regional departments," said the report.

"Close monitoring of project implementation progress, strong collaboration between project team leaders and executing and implementing agencies in promptly resolving implementation issues related to procurement and safeguards, and focus on strengthening the capacity of executing agencies were all contributing factors."

According to the report, the bank met or surpassed 62 per cent of the targets for development results and, operational and organisational effectiveness.

As of December 31 last year, the ADB's cumulative lending to Bangladesh stood at $18.3 billion for 269 loans, $252.4 million for 422 technical assistance projects, and $787.10 million for 35 grants.

As of 31 March 2017, ADB's projects under implementation in Bangladesh comprised of 90 loans and grants amounting to $7.6 billion; and 32 technical assistance projects amounting to $28.58 million.

Again, in 2016, The ADB approved 10 projects for Bangladesh, with loans totalling $1.1 billion and technical assistance of $7.85 million.

Bangladesh is found reluctant to take the World Bank's development policy credit (DPC), a financing window to support government's policy and institutional reforms, officials said.

The multinational lender had been in talks with the government for years on reforms of various financial policies and was ready to offer DPC in this regard, they added.

Though the government is continuing negotiations it is not that much interested to take such credit which is usually tagged with time-bound reforms.

Officials said between 2003 and 2008, the World Bank agreed to support 10 reform projects extending US$1.565 billion worth of DPC.

During the period, various projects were completed with credit support for voluntary retirement scheme (VRS) in the state-owned enterprises, enterprise growth and bank modernisation, setting up of Adamjee export processing zone and emergency support after the cyclone Sidr.

They said despite having some positive results, the government did not take any more DPC after 2008.

"We submitted a document to the finance ministry identifying potential areas of policy and institutional reforms several months back which can be supported by the DPC. But we are yet to receive any feedback," a senior World Bank official in Dhaka told the FE.

He said the government agrees that carrying out a massive financial policy reform is necessary to streamline Bangladesh's policies with international ones.

However, finance ministry officials are pursuing a 'go-slow policy' in concluding negotiations, he noted.

According to the World Bank submission, it wants to support initiatives in four strategic areas which are fiscal reforms, investment climate and competitiveness, financial sector reforms, and energy sector reforms.

"Given the extensive policy and institutional reform agenda facing Bangladesh, the WB's deepening engagement on related initiatives, and the expected expansion of Bangladesh IDA envelop between FY 2018 and 2020, there is substantial scope for re-deploying DPCs to underpin the coherence and momentum of reforms," the bank said.

It said the DPCs can help underpin development, articulation, coordination, and implementation of key policy and institutional actions.

"DPCs can also serve as an important signal to the private sector, development partners, and other stakeholders about the trajectory of the GoB's reform effort, as well as overall commitment," the WB submission mentioned.

The WB note said Bangladesh's macroeconomic performance in recent years has been solid, but redoubled effort will be needed for further initiatives that are at various stages of development and implementation.

It also underscored the need for boosting domestic revenue mobilisation for greater fiscal space, strengthening revenue projections to underpin macroeconomic stability, bolstering debt and cash management to ensure fiscal discipline, strengthening audit for greater accountability, expanding electronic public procurement for grater transparency and efficiency.

In the investment climate and competitiveness front, the World Bank found urgent reforms needed in enactment of rules under the civil procedures code regarding mandatory mediation of civil and commercial cases,  approval of new customs act and companies act, and rationalisation of tariffs on inputs for key sectors with high export potential.

The World Bank also emphasised on modernisation of state-owned banks, addressing non-performing loans, improving credit standards, strengthening regulatory oversight, and expanding financial inclusion.

In the energy field, the World Bank underlined the need for taking initiatives to attract investors with state-of-the-art technology to boost gas exploration and production, reforming the gas pricing regime, corporatising remaining distribution assets under BPDB, and renegotiating rental power contracts.

A senior official at the ministry of finance (MoF) told the FE that the government was interested in taking DPC as it find reforms are necessary and the loan is soft in nature.

But, he said, in case of DPC, at the initial stage of disbursing credits, everything seems to be fine. In the middle period, the World Bank starts tagging various conditions with disbursement of next tranche of fund.

It also tags time-bound implementation of various reform initiatives, which is very hard for a political government, the official said.

"The government now is in a row with businessmen on implementation of a new VAT law which it committed while taking extended credit facility from the International Monetary Fund," he said citing an example.

"But, we want DPC from the World Bank, but not in a hurry," the official said seeking anonymity.

Lead economist of the World Bank in Dhaka Dr Zahid Hussain told the FE usually DPC is being disbursed as budgetary support for carrying out reforms.

He said presently negotiations are underway for taking a project for improving doing business indicators in Bangladesh which can be supported by DPC.

"But, no significant progress is there for DPC in other fronts," Dr Hussain said.

A business review meeting of United Commercial Bank Limited (UCB) consisting the managers of Dhaka zone was held on Saturday at the Learning & Development Center auditorium of the bank. 

The business review meeting was presided over by Muhammed Ali, Managing Director of the bank.

Among others Additional Managing Directors of UCB M. Shahidul Islam,  Mirza Mahmud Rafiqur Rahman, A. E. Abdul Muhaimen and  Md. Tariqul Azam were present at the meeting.

Moreover, Deputy Managing Directors  Mohammed Shawkat Jamil,  Md. Sohrab Mustafa,  Golam Awlia, Arif Quadri and  Mohammad Habibur Rahman Chowdhury along with other senior officials and different managers of UCB were also present at the meeting.    

Review of bank’s performance was the main agenda of the meeting. Alongside, evaluation of bank’s existing strategic policy for catering the future tactical work plan to expand the quality of client service and product diversity was also the issue of the meeting.

Kamruzzaman Bablu :
Bangladesh Bank fears that pressure on the country's foreign exchange reserves will increase if the government approves overseas equity investment by the local firms.
Bank and Financial Institutions Division said it is not clear whether the local firms may return home their equity investment.
The central bank feared the pressure on foreign exchange reserves as Akij Group, Nitol Niloy Group and Ha-Meem Group are now interested to invest overseas.
Local firms' investment proposals in aboard will go to the Cabinet Committee on Economic Affairs as the Bank and Financial Institutions Division did not take decision for its own in this matter.
Bank and Financial Institutions Division has forwarded the Bangladesh Bank proposals to the cabinet committee.
Bank Division's proposal will be placed at a meeting of the Cabinet Committee on Economic Affairs next week.
Akij Group has proposed to invest $20m in Malaysia, Ha-Meem Group $10m in Haiti and Nitol Niloy $7m in Gambia.
Ha-Meem intends to invest in the island nation's garment sector to prop up its shipments to the US, while Akij Group wants to buy a Malaysian company that produce fire board and hardboard. Nitol Niloy plans to in Gambia's banking sector.
The proposal said the local investors are not interested to invest in the country and thus the additional liquidity stands at Tk2,77,956.29 crore in the banking sector.
But the Bangladesh needs invest 32pc of GDP locally to achieve targeted economic growth.
In the proposal, Bangladesh Bank said Bangladeshis firms are capable and has capacity to invest on foreign lands.
As funds are being spent to import fuel oil and capital machinery along with consumer products, the growth foreign exchange reserves becomes slow.
Deficit in the balance of payment stood at $ 790m at the end of December 2016. Foreign exchange reserves now stood at around $33bn - enough to honour at least 7-8 months' import bills.
Bangladesh Bank hopes that there will be new frontier of export earning if Bangladeshi businessmen invest overseas.
There is a possibility that the three firms will return home some foreign earning.
Usually, Bangladesh Bank has examined four matters including ensuring foreign exchange funds will be used in the specific foreign projects and get back foreign exchange funds.
The country will financially benefit from the local firms' foreign investment.
Besides, the government will form a $10bn sovereign funds from the Bangladesh Bank foreign exchange reserves which also put a pressure on foreign exchange reserves.
Dr AB Mirza Azizul Islam, former finance adviser to Caretaker Government, told The New Nation that Bangladesh Bank has shifted its responsibility to the cabinet committee for approval of the firms' investment plans in aboard.
He criticised Bangladesh Bank to forward the proposal to government and avoid making decision although there is a committee concerned to handle such types of matters.