‘PPP can bridge $192 billion infrastructure investment gap’

To make Bangladesh a high-income country and reduce poverty to less than 3 per cent by 2041, the public-private partnership (PPP) model will help leverage private sector enablers in filling an investment gap of $192 billion, Standard Chartered Bangladesh Chief Executive Officer Naser Ezaz Bijoy has said.

This investment is required in infrastructure, he said on Monday while addressing the Bangladesh Business Summit 2023 organised by the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) at the Bangabandhu International Conference Centre (BICC) in the capital.

Referring to a study by Global Infrastructure Hub, he said the gap between Bangladesh’s current investment trend and what it needs to become a high-income country by 2041 will be $192 billion.

The country’s plans are ambitious and the public sector alone cannot fulfil the requirements, Bijoy said, adding more investment is required in the energy sector, followed by telecommunications, transport, and airports.

There are bankability challenges in investments, he said, adding that the lack of sufficient protection for lenders as well as that of confidence in future cash flow limit bankability, which, in turn, creates challenges for long-term financing.

The banker said financial advisors and legal teams should be engaged from the beginning of projects for market-sounding as this will provide the necessary comfort to lenders to offer an optimised debt strategy that will include short- and long-term solutions.

Ensuring access to additional sources of financing, efficiency, innovation, and good management practices are also needed, Bijoy added.

Another challenge is access to land, he noted, saying there is no regulation concerning land rights under the PPP framework while land documentation is largely manual.

In this regard, he recommended increasing access to and preservation of property records by digitising all land records and property registrations.

The Public Private Partnership Authority can have a coordinator to handle ministerial approvals for land lease, resettlement, and relocation as well as assess land-related costs at the outset, Bijoy said.

He said there are now 77 ongoing projects involving $22.5 billion in the country, excluding the power sector.

“Of them, 67 per cent are in transportation, 11 per cent in shipping, 9 per cent in housing, 5 per cent in industry, and 4 per cent in economic zones.

“In the power sector, PPP investments amounted to $5.2 billion between 1990 and 2019 while installed capacity has grown from 5,305MW in 2008 to 22,482MW in 2022,” he explained.

Efficient energy and infrastructure are the essential components of the enabling environment that facilitates rapid and sustainable growth, Bijoy added.