Staff Reporter :
The Asian Development Bank (ADB) plans to cancel or reallocate around $408 million from slow-moving projects in Bangladesh this year, due to implementation delays though progress in several other ADB-backed initiatives.
The decision was made during a project implementation review meeting held in Dhaka on Tuesday, attended by representatives from the ADB, the Economic Relations Division (ERD), and various ministries. Such meetings are conducted twice annually to evaluate project performance and accelerate execution.
“Some projects have faced significant implementation delays,” the ADB stated, noting that the partial cancellation of underperforming loans will “create more headroom for new financing aligned with the government’s priorities.” Of the total, $135 million has already been cancelled due to unspent funds, procurement savings, and exchange rate gains.
Another $166 million will be withdrawn by December, while $107 million will be repurposed for other development priorities, taking the total adjustment to $408 million.
The move follows similar actions by the World Bank, which earlier redirected $670 million from 11 lagging projects. Bangladesh’s public investment performance has been weak — in FY2024–25, only 68percent of the Annual Development Programme (ADP) was implemented, the lowest in nearly five decades. In the first two months of FY2026, execution stood at just 2.39percent, the poorest in 16 years.
An ERD official said that cancelling and redirecting dormant funds would free Bangladesh from paying unnecessary commitment charges and allow reallocation to higher-priority projects.
The ADB emphasised that this approach would strengthen portfolio quality and efficiency.
To address chronic delays, the ADB stressed project readiness — requiring ministries to secure land, complete resettlement and tender plans, and ensure manpower availability before loan approval. It pledged to work closely with implementing agencies to improve procurement and safeguard compliance.
The ADB also warned that 2025 could be a difficult year for Bangladesh, with the upcoming national election and electoral code of conduct likely to slow project progress. It therefore set conservative targets: $150 million in contract awards and $661 million in disbursements by year-end.
As of August 2025, Bangladesh’s ADB portfolio stood at $11.81 billion across 50 projects in seven sectors, along with 37 technical assistance projects worth $61.2 million.
Procurement times have improved — small contracts now take an average of 165 days, down from over 235 days in 2020–2023 — though bottlenecks remain in the energy sector.
Financial management performance was rated “satisfactory”, with 91percent of projects on track.
However, 1,028 unresolved audit issues persist, driven by weak internal audits, staff shortages, and incomplete records.
The ADB urged Dhaka to strengthen financial management and procurement systems to ensure faster, more transparent project delivery.
