Delivery of money through multi-donor fund coordinated by World Bank seen as slight on innate expertise of country well versed in handling climate issues

Millions of pounds of climate change aid to Bangladesh has been returned unspent to the British government following a long-running dispute over its delivery.

Academics and climate change experts claim the return of £13m to the Department for International Development (DfID) over the past year, through the World Bank, represents a failure by the UK to recognise Bangladesh – one of the world’s most climate-vulnerable countries – as an expert on the issue.

News of the unspent cash comes as the world gathers in Morocco for the first climate change talks under the Paris agreement.

The money was part of a £75m pledge made to Bangladesh by Britain in 2008 to provide developing countries with climate finance.

DfID decided that, rather than giving the money directly to the government, it should be channelled through the World Bank as part of the multi-donor Bangladesh Climate Change Resilience Fund established in May 2010. The Bangladeshi government opposed the move, initially refusing to accept the donation amid concerns that the World Bank would attach unfavourable “strings and conditions”, and there were protests in Dhaka about the bank’s involvement. However, donations to the fund were later accepted.

Joseph Hanlon, a visiting fellow in international development at the London School of Economics, said the unspent money was indicative of a failure by donors to trust Bangladeshis, who are “ahead of the curve” in climate change mitigation. He accused DfID and other donors of wanting to portray Bangaldeshis as “victims”, and of insisting they know better.

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“Bangladesh has long had a struggle with the World Bank,” said Hanlon. “But Bangladeshis are very experienced. The level of expertise in terms of engineers and scientists is spectacular. They have been pushing against climate change for 20 years. They have led developing countries in negotiations on climate change. Yet the USA, DfID, and the other donors kept saying, ‘We know better than you.’”

As co-author of the forthcoming book Bangladesh Confronts Climate Change, Hanlon has charted how scientists, politicians and communities in the country have tackled the issue through measures such as raising the land to match sea level rise, and bringing down cyclone deaths. “Bangladesh is poor and vulnerable and needs this money,” he said.

Saleemul Huq, director of the International Centre for Climate Change and Development in Dhaka, said it was a mistake for donors, including DfID, to set up a fund through the World Bank. Huq said: “The bank didn’t work with the Bangladeshi government, they did their own thing. There were demonstrations in the streets about why the World Bank should take that money from a developing country to manage the scheme.”

The Bangladeshi government operates its own climate fund, the Bangladesh Climate Change Trust fund (BCCTF).

“It was a mistake for donors to set up a separate fund,” said Huq. “It’s like saying we don’t trust you and we’re not giving you the money – that’s a bad message from the beginning. What they should have done is said, ‘We are giving it to the government trust fund but with strings attached – it has to be monitored and evaluated.’”

Huq said differences of opinion existed between the banks and the government over which projects to fund.

Last year, DfID’s annual review (odf) of the Bangladesh climate programme in Bangladesh highlighted “ongoing challenges” and tensions within BCCRF. The upshot was a decision by the World Bank and contributing donors to close the fund in June 2017.

The BCCRF started with a pledged $125m (£101m), according to the World Bank. At one point, this had increased to $188m.

DfID’s report said: “The lack of understanding between donors and the World Bank on the operations of the bank’s trust fund model led to much of the tension between donors and the bank over the slow delivery of BCCRF.”

A lack of commitment by the government of Bangladesh had also hampered delivery of the fund, according to the report, which went on to speculate that “this might be explained in part by competition from the nationally owned BCCTF”. DfID’s review, which highlighted corruption and fraud as a “high risk” in the country, also made the point that the fund was at risk due to political instability in Bangladesh the previous year.

A DfID spokesman said: “No UK funds have been lost in the closure of the Bangladesh Climate Change Resilience Fund and DfID’s investment in protecting Bangladesh from climate change has not been affected. Projects started under the fund are protecting some of the poorest and most vulnerable people from weather shocks and will continue until their planned end date.



“The UK remains fully committed to helping the people of Bangladesh build their resilience to the devastating floods and cyclones which hit the country, helping to save lives, homes and schools over the coming decades.”

Facebook Twitter Pinterest Villagers walk on a dried-up river bed in Satkhira, Bangladesh, in 2015. Photograph: Zakir Hossain Chowdhury / Barcro

A spokesman for the Bangladeshi high commission in London suggested relations between the World Bank and the government had soured after the bank pulled out of a £764m project to build Bangladesh’s largest bridge, the Padma Bridge project, citing corruption concerns.

He said: “There were issues over the World Bank over accusations they were making. There are a few issues that the prime minister is very strict about – like there should not be strings attached [to aid]. The PM feels very strongly that we will only take deals that will help. We are becoming stronger in our dealing with the international community.”

In a statement, the World Bank confirmed the BCCRF had been closed down after a joint decision by donors and the bank.

“[The unspent money] could not be spent on activities by a December 2016 deadline,” said the statement. “This money was refunded back to the donors because they wanted to use it for other purposes and asked for refunds. The refund process for all donors is almost complete.

“The government of Bangladesh chaired the management committee running BCCRF and decisions on projects were made by this committee and not the donors alone. The fund was approving projects that passed certain basic criteria/standards and approved by the government of Bangladesh. Projects that were not considered well-designed by the management committee did not get approved.

“Following a review of BCCRF, the donors and the bank jointly decided not to extend the trusteeship, and communicated the desire for strategic planning for a pipeline of climate financed projects.”