France to supply €150m to bounce back from downturn

25 Sep 2020 1:20 PM
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The Agence Française de Développement (AFD), the French government arm that deals with overseas aid, has joined the long set of development partners that contain come forward to help Bangladesh in its efforts to recuperate from the monetary whiplash due to the global coronavirus pandemic.

The French development agency has decided to provide Bangladesh with a soft loan of €150 million following the government's obtain financial assistance, said Md. Ali Hossain, joint secretary of the Europe wing of the Economic Relations Division.

Following outbreak of coronavirus in the united states in March, the federal government enforced a countrywide general shutdown to flatten the curve on the rogue pathogen and effectively forcing the economy to take a hit.

While the virus could not be snuffed out, the shutdown caused great damages to livelihoods.

The pandemic stands to wipe off the gains made in poverty reduction in the past decade, based on the World Bank; and according to estimates, a lot more than 1.5 million of the poor and the vulnerable have lost their livelihoods for the shutdown.
This means the necessity to spend substantially on social safety net programmes and job creation is becoming imperative. At the same time, its purse strings have already been tightened for the near-collapse of financial activities.

This has compelled the government to get for financial the help of abroad.

And the World Bank, the Asian Development Bank, the Asian Infrastructure Investment Bank, the International Monetary Fund, Japan International Cooperation Agency and the Islamic Development Bank had taken care of immediately the calls before AFD's announcement.

"We've gladly received their response and a draft of the financing agreement from the French embassy," Hossain told The Daily Star.

Hopefully, the financing agreement will be officially signed within a brief period after being vetted by the concerned ministries.

The concessional loan may also contribute towards the WB's Cash Transfer Modernisation project, based on the Embassy of France in Dhaka.

The project, which is co-financed by the AFD and World Bank, seeks to increase the transparency and efficiency of selected cash transfer programmes (CTPs) for vulnerable population by modernising service delivery.

It has three components. The first is to improve cash transfer programmes and incentivise action towards the improvement of business processes under select CTPs.

The second reason is to modernise service delivery, which gives technical assistance, helps utilise integrated information systems for targeting and payment and increases citizen engagement.

The 3rd is to strengthen a country's recruiting and Contingent Emergency Response (CER) in a bid to guarantee the rapid mobilisation of funds from the project in times of natural or human-induced disasters.

Therefore, the CER component can help cover Bangladesh's response to the economical fallout from coronavirus.

The loan from AFD will also provide co-financing for the age-old allowance programme of the ministry of social welfare (MoSW) and department of social services (DSS) until 2023.

The fund will directly support the country's most vulnerable population, the intended beneficiaries, while other MoSW cash transfer programmes, together with non-intended beneficiaries, may be eligible for the programme, in line with the Embassy of France.

The AFD, also referred to as the French Development Agency, works to fight poverty and promote sustainable development by implementing policies defined by the French government around the world.

Since 2012, the AFD has been involved in several projects in urban development and infrastructure along with the power and green energy sectors.

Besides, the Paris-based lender also prioritises corporate and social responsibility.

By 2020, the AFD had committed €761 million to Bangladesh, which includes €25 million in the sort of grants.

Through the brand new loan and the next grant of €1 million (2050 facility), the AFD will donate to the improvement of Bangladesh's resilience to climate change adaptation by reinforcing the social protection system.