WB supports Dhaka's reform efforts with $ 320 million

DHAKA, Bangladesh, Jun 18 (BSS)- The World Bank today approved two budget support operations worth $ 320 million to assist the government implement its wide-ranging governance, economic policy, and energy reform agenda.

The $ 200 million Transitional Support Credit (TSC) is
designed to help reduce pressure on the FY 08 budget, which "is
staggering under the weight of the adverse external shocks that
include the twin floods and cyclone Sidr in 2007 as well as the
rising commodity prices, particularly oil, food, and fertilizer,"
said a World Bank press release.

"This would allow the government to protect its expenditures
on core developmental priorities while maintaining fiscal
sustainability. It will also support deepening economic reforms
in a number of areas, including macroeconomic stability,
streamlining of the regulatory environment, restructuring of
state-owned enterprises, and strengthening of public financial
management" the release said.

The $ 120 million Power Sector Development Policy Credit aims
to enhance governance and accountability, and promote financial
stability in the power sector, leading to better service
delivery.

It will support the government's overall power sector reform
program, including procurement of privately financed power
generation, corporatization of state-owned operating companies,
and institutional strengthening of the Bangladesh Energy
Regulatory Commission.

"Extensive damage from successive floods followed by the
devastating cyclone in 2007 and the unabated increases in global
commodity prices have put the Bangladesh economy under
considerable strain." said Xian Zhu, World Bank Country Director
for Bangladesh, according to the release.
"The transitional support credit will help the country's
overall fiscal situation by reducing the pressure on the budget
due to rising spending on oil and food.

It will also ensure the continuation of the government's
reform program, which is focused on tackling weak governance.
Similarly, our power support project will help strengthen
governance in the power sector, which in turn will build a more
robust investment climate, leading to economic growth and poverty
reduction," the release said. BSS.