Opportunity
Bangladesh is the fifth most vulnerable country in the world in terms of risks from natural hazards and climate change. The changing climate poses risk to many economic sectors in the country, potentially causing substantial damage to the country’s economy.
To address the long-term development challenges associated with climate change and population growth, and the goal of economic prosperity, the Government of Bangladesh produced a Delta Plan 2100 (BDP 2100), a strategic response to climate change in coastal areas.
Solution
Over eight years, Mott MacDonald provided the government with support to establish an integrated and adaptive approach to plan and implement investments in the Delta region. This involved:
- preparation of a long-term vision and implementation plan
- design of an investment plan for 80 project interventions integrated into the government’s five-year development plan
- new policy reform agenda to improve the bankability of Delta investments.
The scale of investment required for the Delta Plan meant that participation by the private sector was required to supplement the financing from public authorities.
Seven pioneer Public Private Partnership (PPP) projects were developed as part of the programme to mobilise private finance in large-scale irrigation, inland water transport, dredging and land reclamation, water supply and sewerage services, and embankments with roads. Six project concepts for the Green Climate Fund were also developed to support resilience building in agriculture and flood risk management. The adaptation-related interventions were also integrated into Bangladesh’s National Adaptation Plan.
Although Bangladesh has a strong foundation in PPPs, there had previously been little private investment in delta projects. Policy reforms introduced to accompany the pioneer PPP projects included user charges and credit-worthy off takers. We supported capacity building within government ministries and other agencies to implement bankable projects.
A concept for a Delta Fund was also prepared as a new funding mechanism to address the viability gap of Delta investments, gradually increasing budget allocation for BDP 2100 investments by 2025 to at least 2.5% of Gross Domestic Product a year − about US$ 5 billion.
Outcome
Through a strengthened enabling environment and the seven pioneer PPP projects, Mott MacDonald helped pave the way to scale up private finance in delta projects. These will improve and increase climate resilient infrastructure in the delta and support additional investment across the region.