ADB approves $400m loan for climate-resilient project in Bangladesh

DHAKA: Asian Development Bank (ADB) on Thursday approved $400 million loan for a climate-resilient project in Bangladesh that marks a cofinancing with the Asian Infrastructure Investment Bank (AIIB).

The funding will support the second phase of the "Climate-Resilient Inclusive Development Programme (CRIDP)", which includes nearly $113 million in cofinancing from the Agence Française de Développement and $400 million from the AIIB, the Manila-based lender said.

"The programme will help Bangladesh achieve its climate goals more efficiently by bringing government agencies together and aligning their work with national policies," said ADB senior public sector economist Sameer Khatiwada.

"It will also remove obstacles to mobilising climate finance, reinforce adaptation efforts in priority sectors and speed up actions to reduce climate impacts," he added.

Under CRIDP, ADB said the Bangladesh Climate Development Partnership will be established to secure climate finance and help government ministries develop, implement, monitor and evaluate climate projects more effectively.

A new framework will scale up youth-related and gender-responsive adaptation measures, the bank said, adding the programme also supports a national disaster risk financing strategy, including instruments like crop insurance, disaster risk insurance and contingent disaster financing.

ADB said Bangladesh is one of the world’s most climate-vulnerable nations. Recent studies show that if high greenhouse gas emissions continue, the country could lose up to one-third of its gross domestic product (GDP) by 2070.

Tropical cyclones already cause about $1 billion or 0.7% of GDP in damages each year, and severe flooding could shrink the economy by as much as 9% compared to expected growth by 2050. By that year, Bangladesh could lose 17% of its land and 30% of its food production, pushing food and nutrition security to a critical point.

The programme addresses key constraints such as the lack of a holistic and effective institutional framework, as well as inadequate climate finance and private sector participation. It focuses on creating a supportive environment for climate actions, strengthening adaptation and accelerating mitigation actions.

By RSS/Xinhua