COVID-19 Active Response and Expenditure Support Program:  project 54180-001 in Bangladesh

PROJECT NUMBER: 54180-001
COUNTRIES: Bangladesh
SUBJECTS: Governance and public sector management

OBJECTIVE

The objective of the program is to provide the Government of Bangladesh with budget support to mitigate the severe adverse social and economic impact of the COVID-19. Specifically, the program will help the government to support the worst-hit industries, including the export-oriented industries and SMEs and expand and strengthen its social safety net for the vulnerable groups.

Expected Results:

The program is expected to mitigate the potential economic shock from the COVID-19 pandemic by extending onward assistance to the industries and the vulnerable groups.

(i) By June 2022, national poverty incidence maintained at the 2019 level of 20.5% (Baseline: 20.5% in 2019)

(ii) By March 2021, 15 million poor and vulnerable people (of whom at least 40% are women) benefitted from at least one economic assistance program under the government’s coronavirus disease (COVID-19) response plan (May 2020 baseline: 0)

(iii) By September 2020, at least 1.5 million workers (of whom at least 50% are women) in export-oriented industries benefitted from extended salary support through the program (May 2020 baseline: 0)

(iv) By December 2021, at least Tk170 billion (i.e equivalent approximate USD 2 billion) in loans with subsidized interest provided to the affected industries and sectors and micro, small, and medium-sized enterprises. (May 2020 baseline: 0)

DESCRIPTION

The proposed program will be co-financed with the ADB as lead co-financier, and has been prepared in accordance with the provisions of ADB’s Safeguard Policy Statement (SPS) applicable to policy-based lending.[1] To ensure a harmonized approach to addressing the environmental and social (ES) risks and impacts of the program, the Bank agrees that these provisions of the SPS will apply to this operation in lieu of the AIIB’s ESP, as permitted pursuant to a derogation approved by AIIB’s Board of Directors for Financings processed under the Facility.

Under its SPS, ADB has categorized the program as Category C for environment, involuntary resettlement, and Indigenous Peoples on the basis of an assessment of the countercyclical expenditures to be supported by the program. These focus on expanding and strengthening social safety nets for the most vulnerable groups and are not expected to have any adverse environmental or social impacts. The proposed program has also been categorized by ADB as “effective gender mainstreaming at entry”, as it strengthens the government’s response to the COVID-19 outbreak by addressing gender and social inclusion needs. ES monitoring will be conducted based on guidelines and check lists determined by ADB.

[1]]See, https://www.adb.org/documents/safeguard-policy-statement.

 ENVIRONMENTAL AND SOCIAL INFORMATION

The proposed program will be co-financed with the ADB as lead co-financier, and has been prepared in accordance with the provisions of ADB’s Safeguard Policy Statement (SPS) applicable to policy-based lending.[2] To ensure a harmonized approach to addressing the environmental and social (ES) risks and impacts of the program, the Bank agrees that these provisions of the SPS will apply to this operation in lieu of the AIIB’s ESP, as permitted pursuant to a derogation approved by AIIB’s Board of Directors for Financings processed under the Facility.

Under its SPS, ADB has categorized the program as Category C for environment, involuntary resettlement, and Indigenous Peoples on the basis of an assessment of the countercyclical expenditures to be supported by the program. These focus on expanding and strengthening social safety nets for the most vulnerable groups and are not expected to have any adverse environmental or social impacts. The proposed program has also been categorized by ADB as “effective gender mainstreaming at entry”, as it strengthens the government’s response to the COVID-19 outbreak by addressing gender and social inclusion needs. ES monitoring will be conducted based on guidelines and check lists determined by ADB.

[2]See, https://www.adb.org/documents/safeguard-policy-statement.