Export readiness fund seeks applications for grants
A government fund looking to boost exports from Bangladesh is seeking applications from prospective firms for grants to be used to improve their production capacity.
To diversify exports, the commerce ministry is implementing the Export Competitiveness for Jobs (EC4J) Project, which is supported by the World Bank.
The project is designed to enhance the growth and competitiveness of four sectors and to create more and better job opportunities: leather and leather goods, footwear, light engineering products and plastics.
One of the components of the EC4J is the Export Readiness Fund (ERF), a $10 million matching grant programme, which provides financial support to firms to identify gaps, catalyse investment and improve environmental, social and quality (ESQ) standards, and, thus, improve competitiveness in the export markets, said Md Obaidul Azam, project director of the EC4J.
Launched in January, the ERF began providing support to Bangladeshi firms with ESQ compliance assessments under its funding Window 1. The fund will today roll out the Window 2 and Window 3, according to a media invitation.
Under Window 2, the maximum grant size is $40,000 and it would be used to improve in business and technical services. 40 per cent of the project cost would have to come from the firms.
The Window 3 would provide up to $200,000 and will cover the improvement projects in both services and fixed asset expenditures, with half coming from the entrepreneurs.
The fund will be rolled out at a virtual programme today.
The new windows will support the up-gradation of production plants, equipment, and services and help improve the design and quality of products so they are ready for export. They will also support marketing and distribution to promote ESQ compliance and secure ESQ certification.
Window 1 aims to fund ESQ assessments for 400 companies. It has already signed agreements with 165 companies and is in the process of signing deals with 183 more companies.
Some 230 firms would receive support under Window 2 and another 20 under Window 3.
The ESQ assessment is being carried out by 16 service providers from Bangladesh and other countries under the supervision of UK-based Landell Mills Ltd to find gaps facing the firms, said Azam, also an additional secretary of the commerce ministry.
Thanks to the matching grant, the firms with an export prospect would be able to raise their standard in line with the compliance rules and regulations in the export markets.
The ERF is now rolling out the Window 2 and Window 3 so that firms can get the grants to get ready for exports, he said.
ERF grants are assisting firms to identify and address ESQ compliance gaps, upgrade products and production process and support firms to meet trade standards. This will be done to comply with the laws and regulations of major export markets and requirements of multinational brands, according to the website of the fund, according to an official of the EC4J Project.
The fund will cover three years.
Leather, leather goods and footwear are one of the largest export items of Bangladesh. Overseas shipment from the sector stood at $797.6 million in the last fiscal year, which is 2.37 per cent of the total exports in the year, data from the Export Promotion Bureau showed.
Exports of plastics and melamine products stood at $100.52 million.