Innovation at core: Sustainability drives development strategy of Bangladesh
Farrukh Khosru :
The Annual Development Programme (ADP) for fiscal year 2025-26 has introduced two major innovations, with climate finance and public-private partnerships (PPPs) now formally integrated into the government’s development planning framework. Of the 1,171 projects approved, 228 have been earmarked under the Bangladesh Climate Change Trust Fund, while 79 will proceed under PPP arrangements, aiming to draw in private investment for infrastructure such as bridges, road networks and rural electrification.
Officials said the changes reflect a strategic shift towards sustainable development and fiscal discipline, as the government seeks to address mounting environmental challenges while avoiding additional strain on public finances.
The government approved a Tk2.3 trillion (£18.4 billion) ADP for FY25-26 (July 2025-June 2026), down from Tk2.7 trillion in the previous fiscal year. Of the total allocation, Tk1.4 trillion will be financed from domestic resources and Tk860 billion from foreign aid. The interim administration has signalled that the reduced outlay is consistent with its broader objective of safeguarding economic stability without enlarging the debt burden, particularly in light of ongoing political uncertainty.
The ADP covers a wide-ranging investment strategy with an emphasis on targeted, results-oriented projects rather than expansive portfolios. Of the 1,171 projects approved, 993 are investment projects, 99 are technical assistance initiatives, 19 are feasibility studies and 60 are self-financed. Technical assistance projects are expected to strengthen institutional capacity and improve the quality of larger infrastructure programmes by ensuring groundwork; risk assessment and feasibility analysis are carried out in advance.
Implementation has remained a concern. In FY24-25, government spending under the ADP stood at Tk909 billion, or 67.3 per cent of the allocation, compared with Tk1.2 trillion (76.37 per cent) in FY23-24.
The Implementation Monitoring and Evaluation Division (IMED) attributed the shortfall to the interim government’s suspension and review of several projects introduced under the Sheikh Hasina administration, coupled with disruptions within the bureaucracy and development agencies that resulted in delays and contract terminations.
For FY25-26, five sectors have been prioritised: transport and communications, power and energy, education, housing and community facilities, and health. Together they account for nearly 70 per cent of the allocation. The transport and communications sector has received Tk589.7 billion, followed by Tk323.9 billion for power and energy, Tk285.6 billion for education, Tk227.8 billion for housing and Tk181.5 billion for health.
In terms of ministries and divisions, the local government division has secured the highest allocation at Tk361 billion. The Road Transport and Highways Division has received Tk323.3 billion, the Power Division Tk202.8 billion, the Secondary and Higher Education Division Tk136.3 billion, the Science and Technology Ministry Tk121.5 billion, the Health Services Division Tk116.2 billion, and the Ministry of Primary and Mass Education Tk114 billion. The Shipping Ministry was allocated Tk93.8 billion, the Water Resources Ministry Tk84.9 billion and the Railways Ministry Tk77.1 billion.
In the education sector, allocations will support the School Feeding Programme and the Fourth Primary Education Development Programme, which aim to reduce dropout rates, enhance nutrition and strengthen access to quality primary education. The Secondary and Higher Education Division will focus on ICT integration, infrastructure modernisation and expansion of digital classrooms across universities and colleges. Funding has also been designated for the development of science education and IT-based learning.
Health allocations will fund new medical colleges and hospitals in several districts, burn and cancer units in major public hospitals, dialysis centres, advanced diagnostic facilities and improved medical waste management.
Beyond social infrastructure, the ADP has committed more than Tk1 trillion to the ongoing Rooppur Nuclear Power Plant project. This includes nuclear safety systems, power transmission facilities and supporting off-site infrastructure. Investment in scientific research and higher education institutions is also part of the plan, aimed at building long-term innovation capacity.
Officials have stressed that progress will be closely tracked under enhanced financial and physical monitoring mechanisms. With its renewed focus on sustainability, private sector engagement and tighter fiscal control, the FY25-26 ADP marks an attempt by the interim government to stabilise development momentum while navigating political turbulence.