The New Nation - Internet Edition

UNB, Dhaka

Bangladesh Thursday signed a credit agreement worth US$ 50 million with the International Development Association (IDA) to help restore assets and livelihoods for families affected by cyclone SIDR.

The amount in additional financing coming from the World Bank affiliate for the Social Investment Programme Project (SIPP) would support rehabilitation of the cyclone-affected families.

"The funds would scale up support to the government in developing effective financing and institutional arrangements to empower the poorest and most vulnerable and improve their access to small-scale local infrastructure, assets and livelihoods," it is stated in the deal.

SIPP, which has already benefited over 1,000 villages across Bangladesh, was identified as the best instruments for quickly channeling funds to support livelihoods restoration in the cyclone-affected areas.

The operations under the additional funding will commence in the first week of August in four upazilas as pilot in the coastal areas. The project will cover 14 most affected upazilas and about 40-50 unions.

Mohammad Mejbahuddin, additional secretary of Economic Relations Division, and Xian Zhu, World Bank Country Director, signed the agreement on Thursday at ERD on behalf of their respective sides.

After the devastating cyclone SIDR, the World Bank offered US$250 million short-and medium-term support to help the millions of affected people to recover and to strengthen disaster-mitigation systems. Already US$ 100 million was quickly disbursed as budget support in the last financial year. Another US$ 100 million support is under preparation for delivery in FY 09.

The credit from IDA, the World Bank's concessionary arm, has 40 years to maturity, including a 10-year grace period, and carries a service charge of 0.75 percent.