World Bank extends Padma Bridge loan activation deadline

Bangladesh is still in the running to receive World Bank funding for a key infrastructure project — at least for the next six months.

The World Bank has extended the activation deadline of the $1.2 billion loan it promised for the controversial Padma River bridge project in Bangladesh, the Daily Star says. The bank and Canada are currently investigating allegations of fraud and corruption in the project’s tender process.

The previous deadline of the loan was to expire Jan. 27 and nonextension would have meant the bank is dropping out of the $2.9 billion project. The six-month extension, however, is no guarantee the World Bank will eventually release the funds.

Ellen Goldstein, the World Bank country director, said the lender is waiting for results from the investigations before deciding on whether to push through with the $1.2 billion loan. But Bangladesh Prime Minister Sheikh Hasina said on Thursday (Jan. 26) that the government will decline World Bank funding for the project if the bank can’t prove the corruption charges.

The World Bank first deferred the release of the loan in October 2011 when the allegations of corruptions first surfaced and Canada opened its probe.

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    Ivy Mungcal

    As former senior staff writer, Ivy Mungcal contributed to several Devex publications. Her focus is on breaking news, and in particular on global aid reform and trends in the United States, Europe, the Caribbean, and the Americas. Before joining Devex in 2009, Ivy produced specialized content for U.S. and U.K.-based business websites.