The Agence Française de Développement (AFD), the French government arm that deals with overseas aid, has joined the long list of development partners that have come forward to help Bangladesh in its efforts to recover from the economic whiplash brought on by the global coronavirus pandemic.
The French development agency has agreed to provide Bangladesh with a soft loan of €150 million following the government's request for financial assistance, said Md. Ali Hossain, joint secretary of the Europe wing of the Economic Relations Division.
Following the outbreak of coronavirus in the country in March, the 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, according to the World Bank; and as per estimates, more than 1.5 million of the poor and the vulnerable have lost their livelihoods for the shutdown.
This means the need to spend substantially on social safety net programmes and job creation has become imperative. At the same time, its purse strings have been tightened for the near-collapse of economic activities.
This has compelled the government to seek for financial assistance from 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 responded to the calls before AFD's announcement.
"We have 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 short period after being vetted by the concerned ministries.
The concessional loan will also contribute towards the WB's Cash Transfer Modernisation project, according to the Embassy of France in Dhaka.
The project, which is co-financed by the AFD and World Bank, seeks to improve 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 enhance cash transfer programmes and incentivise action towards the improvement of business processes under select CTPs.
The second is to modernise service delivery, which provides technical assistance, helps utilise integrated information systems for targeting and payment and improves citizen engagement.
The third is to strengthen a country's human resources and Contingent Emergency Response (CER) in a bid to ensure the rapid mobilisation of funds from the project in times of natural or human-induced disasters.
Therefore, the CER component will help cover Bangladesh's response to the economic 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, as well as non-intended beneficiaries, may qualify for the programme, according to the Embassy of France.
The AFD, also known 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 as well as the power and green energy sectors.
Besides, the Paris-based financial institution also prioritises corporate and social responsibility.
As of 2020, the AFD had committed €761 million to Bangladesh, which includes €25 million in the form of grants.
Through the new loan and an upcoming grant of €1 million (2050 facility), the AFD will contribute to the improvement of Bangladesh's resilience to climate change adaptation by reinforcing the social protection system.