Home ›› 01 Nov 2021 ›› Corporate
The business leaders at a webinar on Sunday urged the authorities concerned to ensure a long term vibrant, innovative and structured finance and developed bond market for sustainable infrastructure development.
They claimed that lack of long-term and alternative financing solutions holds back the private sector’s role in the infrastructure development.
Besides, they stressed private investment for gearing up the development in the infrastructure sector.
The trade leaders came up with the remarks while addressing a webinar titled, “Bridging the infrastructure financing gap through credit solutions in Bangladesh” jointly organized by Ministry of Commerce and Dhaka Chamber of Commerce and Industry (DCCI),as part of the Bangladesh Trade and Investment Summit, said a press release.
Speaking on the occasion, Prime Minister’s Private Industry and Investment Adviser Salman Fazlur Rahman said the government’s main job is to play a role of facilitator for the private sector to act properly.
The present government has opened up almost all the sectors like power, airlines, televisions, mobile, banking, insurance, universities to be operated by the private sector. The per capita income of Bangladesh increased to $2227, he mentioned.
Noting that Bangladesh already has an improved infrastructure financing, Salman F Rahman said, “What we need is to create a vibrant structured bond market in our country. For long term sustainable infrastructure financing, we need to think of more strategies to go the next level.”
“Right at this moment there is a huge liquidity in the banking sector and if we could have been able to divert this liquidity into bond that would have been helpful,” he said.
DCCI President Rizwan Rahman said, “The smooth infrastructural financing would bring in far-reaching and result-oriented effects on private sector prosperity and game-changing economic transformation. We need to leverage our financing and engage private sector for infrastructural development reducing dependence on national budget.”
He added that a robust financial ecosystem enshrining Banking and capital market led options is to be ensured to support growing infrastructure development. In this regard, the blended financing solutions can overcome the infrastructure investment gap in Bangladesh in the years to come.
“We have seen many important infrastructure projects conceived under PPP model struggle to comply with financial closure for smooth financing. The banking sector contribution to the infrastructure development is more visible than capital market led financing including venture capital, Bond financing in Bangladesh,” he mentioned.
Rizwan said infrastructure is critical enabler of compounding industrialization and economic development. Substantial investment in infrastructure is needed to accelerate trade and economic growth.
The DCCI president further said, “To improve infrastructural competitiveness, investment is being made in wide-ranging infrastructure projects though they are relatively inadequate. Our infrastructure development has been heavily reliant on public sector financing which hovers around 4 per cent to GDP whereas most of our neighboring economies maintain it within 5 per cent to 10 per cent.”
Chairman and CEO of PRAN-RFL Group Ahsan Khan Chowdhury said Bangladesh is growing and it needs alternative financing and funding for infrastructure development and private sector.
“Bangladesh also needs to improve its sovereign credit rating which at present is at BB- and it will be a challenge for private sector. We need to raise bonds in the international market,” he added.
Managing Director of Standard Chartered Bangladesh Muhit Rahman said large infrastructure projects need financing of 12-15 years. “Our debt to GDP ratio is around 39 per cent. There are ample opportunities for Bangladesh to avail foreign currency solutions.”
“We need to focus on attracting commercial loans and bond investments. Domestic source is not enough, it will have to have a mix of local and foreign currency solution. Moreover he urged upon financial risk management practices.”
Bangladesh Bank Executive Director Dr Abul Kalam Azad said, “we need more infra funding as it is the backbone of the country’s development. We have to build our own capacity. We can try long term bonds in the capital market. Depending on only banking sector will not meet long term financing. We have to be positive for doing any necessary positive reforms.”
