LABOUR-INTENSIVE INDUSTRIES
$457m deal signed with WB
STAFF REPORTER
World Bank (WB) yesterday pledged to provide $457 million to Bangladesh to help develop private sector-led infrastructure projects, as well as diversify exports in labour-intensive and globally competitive industries such as leather goods, footwear, plastics, and light engineering.
Two financing agreements were signed between Economic Relations Division (ERD) and the WB for financing two projects regarding aforesaid issue. Both projects will help Bangladesh create more and better jobs for its population.
Both agreements were signed by ERD secretary Kazi Shofiqul Azam and WB country director Qimiao Fan on behalf of the government of Bangladesh and the WB, respectively, at the ERD.
The $357 million Investment Promotion and Financing Facility Project II (IPFF II) will build local financial institutions capacity to provide long-term financing to private companies to undertake infrastructure projects in diverse sectors, including power and energy, ICT, waste management, water treatment, energy saving equipment, container terminals, land ports, roads, and bridges.
Due to limited capacity and market constraints, local financial institutions traditionally could not meet the longer-term financing demand for building infrastructure. Built on the success of an earlier project, IPFF II will help local financial institutions to lend to private sector infrastructure ventures through the Bangladesh Bank for a longer term of 8 20 years, beyond the usual term of 5 to 7 years.
Bangladesh can seize the opportunity to accelerate growth and reduce poverty by leveraging private sector financing for much-needed infrastructure development, as well as by diversifying exports beyond the garment sector, said Qimiao Fan.
By bringing private sector provision for infrastructure development, and expanding exports to sectors where the country has already shown comparative advantages, Bangladesh can create more and better-paid jobs and boost prosperity for its citizens.
