Tuesday, April 30, 2024
To support severely impacted businesses—especially those relying on imports for raw materials—amid a shortage of US dollars in Bangladesh, IFC is investing $30 million in Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL), both part of the PRAN Group.
It aims to improve the resilience of the food processing market while creating jobs, fostering gender diversity, and strengthening the economy, reports UNB.
This is the first of IFC’s USD term loans to be used for working capital purposes in Bangladesh, which will enable PDL and HAL to sustain operations, increasing exports and preserving over 30,000 jobs, according to a media release on Sunday.
The IFC will further support PRAN Group to improve the participation of women as well as inclusion in their workplace through relevant policies and practices.
The F&B accounts for approximately 13 per cent of the manufacturing production value and employs 19 per cent of the industrial manufacturing workforce with a projected compound annual growth rate of 12 per cent.
However, the current paucity of foreign exchange, higher energy prices, and power shortages in the country have disrupted the import of raw materials while constraining local commercial banks’ lending ability. Against this backdrop, IFC’s longer-term US dollar financing will help improve access to foreign exchange, supporting Bangladeshi companies to navigate the crisis, it reads.
Director (Finance) of PRAN-RFL Group Uzma Chowdhury said, “As a net importer, regular access to US dollars is critical. But given the prevailing shortage, it has been difficult for us to access USD funds for working capital in a timely manner. By providing scarcely available US dollar working capital, IFC will help ensure the long-term stability of the company’s operations and allow us to contribute to the country’s economic stability.”
IFC Country Manager for Bangladesh, Bhutan and Nepal Martin Holtmann said, “Reiterating our commitment to supporting clients during a crisis, IFC’s financing aims to ease the current lack of access to foreign exchange while enabling private sector growth in Bangladesh. We are optimistic it will help improve food security while prioritizing support for strategically important industries through innovative solutions. By backing PRAN Group, IFC will also contribute to diversifying Bangladesh's export base, key to creating jobs, expanding market opportunities, and enhancing economic resilience.”
Since 2010, the IFC has invested over $3.8 billion to help the private sector grow in Bangladesh.
