Vaccine Purchase: Bangladesh to get $500m from AIIB

The Asian Infrastructure Investment Bank (AIIB) is set to provide $750 million for vaccine purchase and to help the economy to recover from the fallout of the global coronavirus pandemic.

Of the $750 million, the Beijing-based multilateral lender would most likely be providing $500 million for vaccine procurement under the 'Bangladesh Responsive Covid-19 Vaccines for Recovery Project'.

The loan, which will be approved by the AIIB by December, will serve as additional financing to the Asian Development Bank's vaccine procurement programme for Bangladesh.

In October, the finance ministry released $741 million of the $940 million pledged by the Manila-based multilateral lender to buy 10.5 crore doses of Covid vaccines from two Chinese drug makers.

Of the doses, about 7.5 crore shots will be procured from Beijing-based biopharmaceutical company Sinovac and the rest from Sinopharm, a Chinese state-owned company, finance ministry officials said.

The government has planned to spend an estimated Tk 17,000 crore this fiscal year to procure Covid-19 vaccines, Tk 3,200 crore more than in fiscal 2020-21.

Meanwhile, on Tuesday, the government signed a loan agreement worth $250 million with the AIIB to implement policy reforms to accelerate economic recovery from the pandemic.

The loan would be used for enhancing: (i) fiscal space through improved public financial management for revenue and public expenditure, and (ii) enabling environment to foster the growth of cottage, micro, small and medium-sized enterprises (CMSMEs) and associated employment, in line with initiatives of country's Eighth Five Year Plan.

Under the programme, a digital system for tax payment and submission of income tax returns would be introduced, said a finance ministry official.

The programme is also aimed at providing loans among the CMSMEs as well as introducing a digitised system to properly disburse the loan and ensure its monitoring.

It would also progressively digitalise the disbursement of social protection benefits and close down 25 loss-making jute mills, he said.

Steps would be taken for approving, restructuring, closing or privatising loss-making sugar mills under the Bangladesh Sugar and Food Industries Corporation.

The $700 million project of the Bangladesh government has the ADB as the lead financier.

Last month, the ADB has approved its loan of $250 million, while the Export-Import Bank of Korea and OPEC will provide $100 million each for the programme.

The repayment period of the loan from AIIB is 20 years including three years of grace period, according to a press release from the finance ministry.