$300m WB fund for Bangladesh local govt
The World Bank yesterday approved $300 million financing to empower the local governments at grassroots level with flexible funds that would enable communities decide and implement local development priorities.
Built on the success of two predecessor projects, the Local Governance Support Project - 3 (LGSP-3) will cover all the 4550 union parishads, the lowest tier of the local government, and benefit over 115 million residents, according to a press release of the World Bank.
“The World Bank has been a long-standing partner in supporting the government’s vision of advancing decentralization and empowering the local governments,” the press release quoted Rajashree Paralkar, World Bank acting country director for Bangladesh, Bhutan and Nepal, as saying.
“A predictable and transparent financial resource transfer system will help the Union Parishads and the participating Pourashavas to further improve planning, participatory budgeting, public finance management, and accountability,” the release read.
The project will establish national budget transfers as a norm to the Union Parishads.
It will also expand to the urban local government, and pilot a fiscal transfer system in 16 Pourashabhas (municipalities) in all eight divisions of the country.
“Like its predecessors, LGSP-3 will also place a strong emphasis on gender empowerment. At least one third of the Ward Committees and Supervision Committee members will continue to be women,” said Shenhua Wang, World Bank Team Leader for the Local Governance Support Project – 3, according to the press release.
For the first time, the eligible municipalities will receive block grants with discretionary power to select sub-projects aiming to improve service delivery.
Since 2011, through the predecessor LGSP, all Union Parishads have been receiving annual block grants with full discretion to deliver local services, after undergoing rigorous audit process.
The credit from the World Bank’s International Development Association, which provides grants or zero-interest loans, has a 38-year term, including a six-year grace period, and a service charge of 0.75 percent.
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