In addition, the Bretton Woods institution has made a commitment to provide $1.6 billion loans in current fiscal year.

At a city hotel last week, the WB people met high officials of the government to discuss broadly on the proposed loans and conditions.

The bank is likely to grant $400 million as budgetary support, of which $200 million will be given as development support credit (DSC), $100 million as power sector support credit and the rest as education sector support credit.

Around $500 million, which was last fiscal year's commitment, will be given in the current fiscal for water, roads and highways, public procurement cell reforms and avian flu control programmes.

"World Bank is interested to provide another $600 million loans for new development projects," a source said.

The government will have to fulfil a number of conditions, mostly reforms in sectors like banking, revenue and energy, as well as in civil administration to get budgetary support credits from the institutions.

"We have got World Bank proposals for supports in different sectors and discussion has already begun on their proposals (conditions)," an official of the finance ministry said. "We are hopeful to finalise the issues by next month," he added.

For improved quality of public administration, the Bretton Woods institution proposed the government ensure that the civil servants comply fully with the recently introduced legal requirement of mandatory submission of income tax returns and statements of assets and liabilities. Besides, the institution observes that the government needs to adjust power tariffs at full cost recovery levels.

The conditions also include sale of Agrani Bank and appointment of private management for Sonali and Janata banks. Besides, revamp of the boards of the corporatised NCBs (nationalised commercial banks) strictly on the basis of fit and proper regulations of Bangladesh Bank is on the WB's list of conditions.

Sources said that the institution has also asked the government to bring transparency in public procurement. "One of the World Bank conditions is to introduce electronic government procurement system in ministries, Roads and Highways Department, Local Government and Engineering Department, Rural Electrification Board and Water Development Board," one source said.

For financial accountability and resource management, the WB has proposed to establish functional financial management units in different ministries.

The institution also prefers to continue the process of strengthening the Anti-Corruption Commission (ACC), providing it with non-discriminatory allocation of budgetary resources and ensuring a rigorous screening process for selecting its staffs.

The WB asked the government to introduce separate pay scale for Bangladesh Bank employees as well as compensation packages on performance approach.

For power generation, it said that the government should attract private investment through a fair, transparent and competitive bidding process, adhering to least-cost principles.

"The donors are happy with the reform programmes and they have made commitment for further funds," an official of the External Relations Division (ERD) under the finance ministry said. The government would examine effects of different reform proposals by the WB and simultaneously prepare time frames for implementing those.

"The government rightly views the current situation as a major and unique opportunity for implementing bold reforms and turning around weak governance," the Development Support Credit IV Project document of the WB says.

At the same time the WB feels that this ambitious reform programme will need flexible concessional financing and (the government) has requested support from it in the form of a budget support operation in FY08, the document quotes.