BD Finance eyes $2b US investment

Bangladesh Finance and Investment Company Ltd (BD Finance) has signed a deal with US-based Sovereign Infrastructure Group (SIG) to attract $2 billion worth of investment in infrastructure projects in the next two years.

BD Finance, a concern of Anwar Group, inked the agreement in Washington on Thursday, according to a joint press release. 

The embassy of Bangladesh in Washington hosted the deal signing ceremony to commemorate the execution of a memorandum, which will serve as a long-term collaboration framework intended to enable SIG to bring American capital market investors to infrastructure projects in Bangladesh through BD Finance. "This is a commitment for the largest-ever foreign funding brought by a Bangladeshi financial institution," Manwar Hossain, chairman of BD Finance and group managing director of Anwar Group, told The Daily Star on Thursday.

With a project pipeline of more than $2 billion, BD Finance has mandated SIG on the initial financing of a direct loan of $40 million to be used for on-lending to SMEs, green energy projects, women entrepreneurs, social housing, economic empowerment initiatives for transgender individuals, and the refinancing of existing BD Finance obligations.

"We will finance different banks and financial institutions under the fund. BD Finance will utilise around$150 million from this fund," Hossain said.

"This is a historic event for the banking and financial sector of Bangladesh. This is the largest foreign investment effort by a financial institution in Bangladesh.

We are committed to making lending very competitive and borrowing very affordable."

BD Finance is a financial institution and public limited company listed both on Dhaka and Chattogram stock exchanges. It provides financial services to a diversified base of clients and businesses to contribute to Bangladesh's social and economic development.

SIG is a global structured financing company that works with project sponsors and development finance institutions, and national and local governments in originating and structuring infrastructure investments in growth markets.

If SIG maintains at least 4 per cent shares in BD Finance during the term of the memorandum, the US company will be guaranteed a seat on the board of the Bangladeshi firm.

BD Finance and SIG will give priority to the projects that are supported by the government of Bangladesh, projects in economic zones and export processing zones.

Projects preferably structured as a public-private partnership and that benefit from an off-take agreement, availability payments, power purchase agreements, or other arrangements from a mutually accepted sovereign, sub-sovereign, or municipal government will receive focus.

Direct foreign investment nexus in the form of equity or debt co-financing, guarantee, or project structuring will be preferred to finance the projects, according to the statement.

Lerry Knox, co-founder and CEO of SIG, said SIG was founded to bridge the global infrastructure investment gap by mobilising US institutional investor capital into growth markets such as Bangladesh.

Bangladesh is a top priority for SIG and is one of the fastest-growing economies in the world, said Knox.

Bangladesh is currently on track to investing an impressive $417 billion in infrastructure by 2040, he said in the statement. 

"Through our engagement with BD Finance, SIG hopes to play a leading role with our partners to support the country's tremendous growth."

Benjamin Levine, vice-president of SIG, said the event commemorating the memorandum between SIG and BD Finance was the beginning of a worthy endeavour—one that will support Bangladesh's economic growth for years to come.

Waeez Hossain, deputy managing director of Anwar Group of Industries, said the agreement was orchestrated to help strengthen the foundation of Bangladesh's infrastructure to compete on a global scale.

"I hope relationships like these can be a model for our competitors in Bangladesh, to support the ever-increasing requirements of the industrial sector."

Shares of BD Finance closed 0.65 per cent higher at Tk 30.90 on the Dhaka Stock Exchange on Thursday.