The World Bank
First Green and Climate Resilient Development Credit (P179079)
Program Information Document
(PID)
Appraisal Stage | Date Prepared/Updated: 19-Mar-2023 | Report No: PIDA35677
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The World Bank
First Green and Climate Resilient Development Credit (P179079)
BASIC INFORMATION
A. Basic Project Data OPS TABLE
Country Project ID Project Name Parent Project ID (if any)
First Green and Climate
Bangladesh P179079 Resilient Development
Credit (P179079)
Region Estimated Board Date Practice Area (Lead) Financing Instrument
Environment, Natural
Development Policy
SOUTH ASIA 27-Apr-2023 Resources & the Blue
Financing
Economy
Borrower(s) Implementing Agency
People's Republic of
Finance Division, Ministry of Finance
Bangladesh
Proposed Development Objective(s)
To support the Government of Bangladesh to transition to green and climate resilient development by (i) enhancing
public planning, financing, and delivery of green and climate resilient interventions; and (ii) promoting key sector
reforms for greener and more efficient production and services.
Financing (in US$, Millions)
FIN_SUMM_PUB_TBL
SUMMARY
Total Financing 500.00
DETAILS -NewFin3
Total World Bank Group Financing 500.00
World Bank Lending 500.00
Decision
Other
Explanation
The review authorized the team to appraise but not to negotiate
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The World Bank
First Green and Climate Resilient Development Credit (P179079)
B. Introduction and Context
Country Context
Bangladesh made rapid social and economic progress in recent decades and reached lower middle-income status in
2015. Annual GDP growth averaged close to six percent since 2000. Strong labor market gains contributed to a sharp
decline in poverty, with the national poverty rate falling from 48.9 to 24.5 percent between 2000 and 2016. However,
the pace of poverty reduction slowed in recent years even as growth accelerated, particularly in urban areas and in the
west of the country. Annual consumption growth of the bottom 40 percent (1.2 percent) trailed that of the overall
population (1.6 percent) from 2010 to 2016.
As the country recorded a robust recovery from the pandemic shock, it faces new macroeconomic challenges from
rising global commodity prices, slowing global growth, elevated domestic inflation, and strong pressures on its balance
of payment. Bangladesh also needs a paradigm shift in its growth model to ensure a lasting economic recovery. The
country’s development pathways, from relatively high manufacturing growth to rapid urbanization, has been associated
with increased carbon intensity and limited resource efficiency that have resulted in alarming levels of pollution,
reduced climate resilience, and depletion of natural resources. Environmental degradation has impacted the health,
productivity, and welfare of the Bangladeshi people, and impairing human capital formation and retention. Additionally,
Bangladesh faces a high level of vulnerability to the effects of climate change. The Global Climate Risk Index ranks
Bangladesh as the world’s seventh most-affected country in 2000-2019. Internal climate and rural-urban migration will
put additional pressure on cities and essential services – such as water supply, sanitation, and energy – that are already
constrained, especially for the most disadvantaged groups.
Relationship to CPF
The First Green and Climate Resilient Development (GCRD) Credit is consistent with the FY16-20 Country Partnership
Framework (CPF) and is aligned with proposed objectives of the new CPF (FY23-27) currently under preparation.
C. Proposed Development Objective(s)
To support the Government of Bangladesh to transition to green and climate resilient development by (i) enhancing
public planning, financing, and delivery of green and climate resilient interventions; and (ii) promoting key sector
reforms for greener and more efficient production and services.
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The World Bank
First Green and Climate Resilient Development Credit (P179079)
Key Results
To enhance public planning, financing, and delivery of green and climate resilient intervention, key results will be
measured by (i) improved alignment of budget with climate change strategies; (ii) improved expenditures and
corresponding reporting by City Corporations and Category A Pourashavas in GCR priority activities; (iii) more women-
led businesses participating in public procurement; (iv) selected Public Sector Organization (SPSOs) using sustainable
public procurement; (v) approval of Development Project Proforma for Bangladesh Delta Plan (BDP) 2100 projects; and,
(vi) increased inspections of industries and projects for compliance with environmental regulations.
To promote key sector reforms for climate-smart production and services, the DPC aims the following results: (i)
increased share of non-fired bricks used in public works compared to total brick production; (ii) reduced number of
households using solid fuels for cooking; (iii) energy savings; (iv) reduction of fiscal expenditures on fuel subsidies; (v)
reduction in power generated by liquid fuel-based generation; (vi) new municipalities adopting WSS tariff models.
D. Project Description
The reform program supported under the DPC series operationalizes key policy recommendations from the recently
completed Country Climate and Development Report (CCDR). This DPC series complements the parallel Recovery and
Resilience DPC series. While the latter focuses on structural reforms to enable economic recovery from the Covid-19
pandemic and promote overall growth, the GCRD series supports policies to transition to a greener and more climate-
resilient development to ensure sustained economic growth.
Under Pillar A, the DPC supports reforms to (i) strengthen prioritization and efficiency of public investment planning as
well as its implementation, at national and local levels, based GCRD criteria; and (ii) enhance environmental governance
for clean, resource efficient and socially sustainable production and consumption. Pillar B supports reforms to: (i) improve
air quality management and reduce emissions across productive sectors; (ii) increase energy efficiency; (iii) reduce fiscal
costs from the energy sector; (iv) increase efficiency and resilience of WSS services.
E. Implementation
Institutional and Implementation Arrangements
The Ministry of Finance (MoF) is responsible for overall oversight and implementation of the operation. Sector ministries
are responsible for implementing the policy reforms – as well as designing and approving the indicative triggers of the
DPC series. MoF has assigned focal points for each line ministry to follow up on the policy reforms and led regular inter-
ministerial meetings to discuss the DPC preparation. This practice is expected to continue during DPC1 implementation
and subsequent operations in the series. The World Bank team will continue to provide support to the government in
monitoring the reform progress and results. This will be facilitated by regular engagement of the teams implementing
technical assistance programs and investment operations in support of the reforms in this DPC. Regarding disbursements,
the DPC will follow the World Bank’s disbursement procedures for development policy support. The GoB will open a
dedicated United States Dollar foreign currency account with the Bangladesh Bank into which the proceeds of the credit
will be disbursed on a single tranche basis.
F. Poverty and Social Impacts, and Environmental, Forests, and Other Natural Resource Aspects
Poverty and Social Impacts
Overall, the reforms supported by this operation are not likely to generate significantly negative poverty, social and
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The World Bank
First Green and Climate Resilient Development Credit (P179079)
distributional impacts on the Bangladeshi population on average. Reforms geared towards devolving finance to local
levels, strengthening environmental governance, and promoting sustainable procurement, which promote inclusion of
disadvantaged groups are all likely to have broad positive impacts on the population. However, further analysis will be
undertaken to unpack possible distributional effects of some reform measures in the subsequent operations in the DPC
series. Impacts on specific sub-groups and sub-national regions will be also analyzed.
Environmental, Forests, and Other Natural Resource Aspects
The GCRD Credit series supports reforms that are fundamentally designed to improve environmental (including climate),
forests, and other natural resources. All prior actions supported by the DPC are likely to either have positive or no
negative effect on the environment, forests, or other natural resources of Bangladesh. Policies reforms with likely positive
effects will (i) incentivize the ministries and local government institutions to allocate more funds to green and climate
resilient activities; (ii) improve environmental risk management and air quality management, with high potential of
generating significant positive impacts in air quality and other environmental health conditions, as well as on GHG
emissions; (iii) promote energy efficiency; and (iv) improve the efficiency and quality of WSS services, thereby improving
access to adequate water supply and sanitation.
G. Risks and Mitigation
The overall residual risk rating for this operation is substantial. The Macroeconomic risks are substantial. The inherent
risks of macroeconomic stability could be high with continued global uncertainties, heightened pressures on balance of
payments with the continued declining trend of forex reserves, coupled with the presence of de facto multiple exchange
rates. These risks are partially mitigated by the GoB’s reform program, supported by the IMF arrangements and ongoing
World Bank and ADB policy lending programs. Stakeholder risks are substantial as some reforms may face resistance
from interest groups, particularly on power plant rentals, water tariffs, and new environmental quality standards and
regulations. Technical design risks and institutional capacity for implementation and sustainability risks are also
substantial, given that reforms supported by the operation are complex in nature and in innovative, and institutional
capacity gaps exist. Limited technical capacity, a complex organizational structure, and weak interagency coordination
pose additional risks to the achievement of the program development objective. Risk mitigation includes strong
government ownership of the proposed reforms, and its efforts to strengthen stakeholder consultations, redirect
subsidies to the most vulnerable groups, enhance regulatory capacity of relevant authorities, and adopt additional
interventions to support stakeholders’ compliance with regulations. In addition, the World Bank’s existing and planned
technical assistance will support reform implementation.
.
CONTACT POINT
World Bank
Ana Luisa Gomes Lima, Yutaka Yoshino
Senior Environmental Specialist
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The World Bank
First Green and Climate Resilient Development Credit (P179079)
Borrower/Client/Recipient
People's Republic of Bangladesh
Implementing Agencies
Finance Division, Ministry of Finance
Rehana Perven
Additional Secretary, Macroeconomic
parveenrehana@yahoo.com
FOR MORE INFORMATION CONTACT
The World Bank
1818 H Street, NW
Washington, D.C. 20433
Telephone: (202) 473-1000
Web: http://www.worldbank.org/projects
APPROVAL
Task Team Leader(s): Ana Luisa Gomes Lima, Yutaka Yoshino
Approved By
APPROVALTBL
Country Director: Abdoulaye Seck 27-Feb-2023
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