Bangladesh - Independent Evaluation Group - World Bank

the government has ambitious plans of adding 9,000 megawatts of generating capacity by
2015, requiring a large number of 300 megawatt and larger power plants, the World Bank
Group has been unable to finance one since the 360 megawatt Haripur plant more than 10
years ago. The only Bank financing to the power sector since then has been of small IPPs
supported by the Investment Promotion and Financing Facility (IPFF). Political economy and
other diagnostic work is ongoing to understand how the World Bank Group might be more
helpful, but the impact is unknown (World Bank 2010b, 2010c).
4.25 Investment Climate. The effectiveness of World Bank Group support to improving
the investment climate is rated as substantial. Macrostability has been maintained. Stateowned
enterprise losses and public debt have been reduced. There has been substantial
progress on reducing trade restrictions and administrative barriers, including a reduction in
average nominal protection, progress in improving the efficiency of customs and port
administration, and a reduction in administrative barriers. Private sector banks now hold a
majority of assets. Public sector banks have not been privatized, although three have been
corporatized. Public-private partnership guidelines were adopted in 2010, and an institutional
framework is being rolled out to implement them, including a new Public-Private Partnership
Unit in the Prime Minister’s Office. The Bangladesh Economic Zone Bill adopted in 2010
will facilitate the creation of special economic zones in Feni, Khulna, and Sylhet districts.
The Bangladesh Infrastructure Finance Fund, Ltd., was approved by the Cabinet in 2010 to
issue bonds, debt instruments, and equity offerings (World Bank 2010d).
4.26 Many reforms have come about through dialogue between the public and private
sectors that has been supported by the World Bank Group since 2005. The Bangladesh Better
Business Forum, which started in 2007, was constituted with 21 private and 20 public
members and chaired by the Prime Minister. In slightly more than a year, the forum held six
meetings that included 46 sessions by five working groups. These deliberations resulted in
290 recommendations of which 209 were approved, 8 were not approved, and 73 are
awaiting decision. Of those approved, 94 have been fully implemented and 115 are being
implemented. However, the forum did not meet once the present government took office and
was formally dissolved in 2010. Another example of dialogue was the Regulatory Reforms
Commission, set up in 2007 with 17 members to prepare recommendations to modernize
government rules and regulations, some of which have been adopted. The Board of
Investment acted as the secretariat of the commission.
Project-Level Effectiveness
4.27 During its first year, the Operational Risk Mitigation Team advised seven project
teams on financial management and procurement risks. During 2007-08, country
management relied on it to vet project concept notes and appraisal packages. The team
lacked a formal terms of reference or allocated staff and financial resources. This, combined
with the difficulty of meeting as a team with key staff split between Dhaka and Washington,
resulted in challenges for implementing the ORMAP. The team helped to sharpen risk
management frameworks but did not contribute to major, strategic go-or-no-go decisions or
to decisions on instrument choice, for example between investment lending and development
policy loans.
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