ADB More Than Doubles Sovereign Financing to Bangladesh to $2.57 Billion in 2025

The Asian Development Bank committed over $2.57 billion in new sovereign financing to Bangladesh in 2025, more than double its previous $1.18 billion commitment the previous year, as the country wracked with socio-political instability, continues grappling with the throes of rising inflation, dwindling economy, and reducing consumer power.

The new 2025 lending programme as such, prioritises investments in energy, transport, banking reforms, urban services, climate resilience, small and medium-sized enterprises, and livelihood support in Cox's Bazar, reports The Daily Star.

As per govt data, Bangladesh's overall inflation has risen noticeably risen from 8.29% in November, to 8.49% in December, the previous year. The rise is said to have been triggered by mounting hikes prices of both food and non-food commodities, according to the Bangladesh Bureau of Statistics.

The food inflation has reportedly climbed up to 7.71% from the previous 7.36% rate, while inflation of non-food commodities surged from 9.08% to 9.13%, underscoring renewed pressure on consumers.

According to the ADB, its 2025 portfolio reflects a balanced sectoral spread with a strong emphasis on infrastructure development and institutional reform. Sovereign financing refers to loans, grants or guarantees provided directly to governments or state-backed entities, with the state ultimately responsible for repayment.

"We proudly reaffirm our commitment to supporting Bangladesh's priorities during this significant transition period," said ADB Country Director Hoe Yun Jeong, adding that the ADB's 2025 commitments with the country underscored its enduring partnership with Dhaka, in close collaboration with the Economic Relations Division and other government agencies for boosting ventures related economic diversification, infrastructure, services, and human development.

Of the $2.57 billion committed across ten projects, around 35% was allocated to transport infrastructure, 23% to finance, and 16% to public sector management and governance, with energy projects accounting for 11%, water and urban development summing up 9%, and human and social development standing at 6%.

The major approvals included the $688 million South Asia Subregional Economic Cooperation Chattogram–Dohazari Railway Project, aimed at upgrading a key rail corridor and enabling direct train services from Dhaka to Cox's Bazar.

Other flagship commitments were the $500 million Stabilising and Reforming the Banking Sector Programme (Subprogramme 1) and the $400 million Climate-Resilient Inclusive Development Programme (Subprogramme 2).

As per the ADB, its project implementation improved in 2025 owing to stronger project readiness and enhanced portfolio management.

Non-sovereign financing supported private-sector investments in textiles, renewable energy, trade finance, food security, microfinance and public–private partnerships, while joint efforts with development partners mobilised $720 million in co-financing.

As of December 31, 2025, ADB's cumulative sovereign and non-sovereign commitments to Bangladesh exceeded $42 billion, with an active sovereign portfolio of 48 projects valued at $10.8 billion.