ADB lends $940m for vaccine purchase

The Asian Development Bank (ADB) has provided $940 million to Bangladesh in loans to purchase safe and effective vaccines against the Covid-19.

The ADB and Bangladesh government on Thursday signed a $940 million loan agreement to finance the “Responsive COVID-19 Vaccines for Recovery Project under the Asia Pacific Vaccine Access Facility Program" which will be implemented under the Finance Division.

A press release of the Economic Relations Division said on Thursday, Fatima Yasmin, Secretary of Economic Relations Division (ERD) and Manmohan Parkash, Country Director of ADB signed the loan agreement on behalf of Bangladesh and ADB, respectively.

Manmohan Parkash said, “Safe and effective mass vaccination is critical for protecting lives and livelihoods, and ensuring quick socio-economic recovery from the COVID-19 pandemic.” 

“This is our single largest support for vaccine procurement till now, and ADB is committed to helping the government of Bangladesh in procuring quality and affordable vaccines early,” he added. 

Parkash noted that in addition to vaccine procurement, ADB is also pleased to help improve the vaccine registration, delivery, distribution, monitoring, coordination, and management systems. 

“The assistance follows our reoriented program priorities in supporting a quick socio-economic recovery in Bangladesh,” he said.

The package, which comprises a regular loan and a concessional loan of $470 million each, is part of ADB's $9 billion Asia Pacific Vaccine Access Facility (APVAX) launched in December 2020 to offer rapid and equitable vaccine-related support to ADB's developing member countries (DMCs). 

The project will fund the purchase of an estimated 44.7 million doses of Covid-19 vaccines to be administered to more than 20 million Bangladeshis by 2024.

The vaccines will be secured through the Covid-19 Vaccines Global Access (COVAX) program, the United Nations Children's Fund (UNICEF), or bilateral arrangements with vaccine manufacturers or distributors.

However, Finance Division (LGD) is the Sponsoring Division, Directorate General of Health Services (DGHS) is the Implementing Agency and Health Services Division (HSD) is the oversight body of the program. The implementation period is from lune, 2021 to May, 2024. The objective of the program is to assist in the purchase of vaccines for COVID-19.

Out of $940 million equivalents to TK 7971 crore, ADB will provide $470 million as Ordinary Operations Loan with an interest rate of 2 percent. 

This loan repayment period is 25 years with a grace period of 5 years. The rest $470 million will be provided as regular OCR loan. 

The rate of interest for the regular OCR loan is London Inter-Bank Offered Rate (LIBOR) based. 

In addition, a commitment charge at the rate of 0.15 percent will be applicable on the undisbursed amount. This loan repayment period is 15 years with a grace period of 3 years.

ADB is one of the largest multilateral Development Partners of Bangladesh. Its total loan amount to Bangladesh Government stands about US$ 26.46Billion of which $25.25 Billion loans and Technical Assistance (TA) $1.21 billion.

In addition, ADB provided $ 500 million budget support, $250 million Policy Support to implement the stimulus packages declared by the Honorable Prime Minister, $100 million support for COVID-19 Response Emergency Assistance project and $9.34 million grant to tackle the adverse social and economic impact caused by COVID 19 in Bangladesh. 

So far, the development assistances of ADB mainly focuses on Power, Energy, Local Government, Transport, Education, Agriculture, Water Resources, Good Governance, Financial Sectors as well as Private Sectors of Bangladesh.