World Bank’s $1.1 billion emergency loan: A major relief to address fertilizer and energy crises

The World Bank is providing Bangladesh with an emergency loan of $1.1 billion (1.1 billion US dollars) to address the uncontrollable increase in fuel and fertilizer prices in the global market and supply shortages due to the Middle East crisis. The money has been approved under two separate projects to ensure the country's food security, protect small farmers and sustain employment.

The loan was approved at the World Bank headquarters in Washington on Friday (June 26). Jean Pesme, the organization's Division Director for Bangladesh and Bhutan, said that the Bangladesh economy has been in deep crisis due to the increase in food, fertilizer and energy prices and the shrinking revenue sector due to the Middle East crisis. This has hit small farmers and the poor and vulnerable people hard. In this situation, the World Bank is providing this immediate assistance to ensure the supply of fertilizer for Aman and Boro cultivation and protect people's livelihoods.

The approved $1.1 billion will be spent mainly on two sectors—

Emergency Food Security Assistance Project: Under this $300 million ($300 million) project, fertilizer will be imported for the period July-October 2026 (Aman season) and October 2026-April 2027 (Boro season). Bangladesh imports more than 85 percent of its fertilizer requirements. Through this project, 600,000 metric tons of emergency fertilizer will be imported (half of which is urea), which will directly support smallholder farmers in rice production on 1.4 million hectares of land in the country.

World Bank Lead Economist and Task Team Leader Suleiman Coulibaly said that Bangladesh’s food security mainly depends on Aman and Boro rice, which account for about 90 percent of total production. In addition, half of the country’s population is engaged in agriculture. As a result, any disruption in fertilizer supply will not only threaten food security, but also increase poverty and take away employment.

Emergency Response Project: The remaining $713 million (713 million) large fund will be used for urgent financial needs. This includes cash assistance and livelihood grants for affected families and small and medium enterprises. In addition, this money will be spent on fuel, food, medicine, medical equipment and water supply to keep emergency services running. As part of the World Bank's Crisis Preparedness Toolkit, this fund has been formed by repurposing unused funds from existing ongoing projects, which will be quickly released by June 30, 2026.

Economists and stakeholders say that at a time of pressure on reserves and internal revenue crisis, this large $1.1 billion package from the World Bank will provide temporary relief to the country's macroeconomic situation. In particular, the country will be protected from disruptions in agricultural production, which will also play a role in controlling inflation.