BB to resume refinancing of infrastructure dev projects

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FE Report
Bangladesh Bank (BB) will soon resume its re-financing facility with disbursement of US$250 million to infrastructure development projects in six key sectors including ports, power, environment, industrial estates and water supply.
"A draft agreement was signed between the World Bank and the government in this connection on March 20 this year," a senior BB official told the FE Wednesday.
The fund will be released after the World Bank gets final approval from its board of directors. A board meeting is due in May next.
The central bank as an implementing agency will place the fund under its Investment Promotion and Financing Facility (IPFF) project.
"We'll receive $257 million from the World Bank under the project. Of which $7.0 million will come as technical assistance," the BB official said, adding the fund will be disbursed through selective commercial banks and non-banking financial institutions (NBFIs).
The sectors, which have already been identified for financing under the IPFF, are power generation including captive power plant, port development including internal container terminal, environment, highways and expressways, airports and water supply and distribution.
"No more fund is now available for lending purpose with two years remaining for completion of the IPFF project. So, another $257 million is being made available from the World Bank as additional financing
for the IPFF," the BB official noted.
In 2007, the central bank launched the five-year-term IPFF project with $50 million fund provided by the World Bank through public-private participation process.
"Almost 97 per cent of the fund has so far been utilised for financing seven power plants, which have been able to add 178 megawatt (MW) power to the national grid," the central bank official added.
Under the existing provisions, the fund will be disbursed on the basis of 70:30 debt equity ratio to the entrepreneurs while the central bank will provide 56 per cent of the total debt and the rest 14 per cent will have to be invested by the banks or the NBFIs concerned.