$250m line of credit

Turkey fails to keep promise

Turkey has failed to implement its commitment of providing USD 300 million line of credit for private sector investment in Bangladesh, even four years after giving the assurance.
In 2012, Bangladesh evinced interest in borrowing USD 250 million suppliers’ credit from Turkey to implement some public-private partnership (PPP) projects. Even Turkey’s labour and social security minister Faruk Celik had announced to provide the USD 300million line of credit.
The assurance had come at the last Joint Economic Cooperation meeting between the two countries held in Dhaka in November 2012. But since then, the Turkish authorities have not implemented any of the commitments made at the JEC meeting, government sources told The Independent.
Sources at the Economic Relations Division (ERD) said the preliminary formalities for the borrowing were almost completed four year ago as Türk Eximbank showed interest to give USD 250 million LoC for implementing PPP projects, especially those in the infrastructure development sector.
Even the Turkish government had placed the proposal by Türk Eximbank at its cabinet meeting.
On February 29, 2012, a meeting was held at the ERD to discuss the framework of the agreement.
Türk Eximbank also sent the draft framework agreement to ERD. Two Eximbank officials— assistant general manager (buyers’ credits) Alaaddin Metin and assistant manager (in charge of Bangladesh) Suzan Usta—had visited Dhaka to negotiate the deal.
On April 24, 2012, the Türk Eximbank wrote to the counsel of Bangladeshi embassy in Turkey, Shah Asif Rahman, saying, “The loan facility will be provided in accordance with the preference of government of Bangladesh. The selection of the projects, as well as experts or construction firms, will be managed by the Bangladeshi side.”
The bank also wrote, “As Türk Eximbank borrows on floating rates, all of our loans are also offered at floating rates. The rate offered to Bangladesh, and for any other party, is determined in such a way that it does not go below the cost of borrowing of Türk Eximbank.”
According to the draft framework agreement prepared by the Bangladesh finance ministry, the credit facility would be made available by Türk Eximbank to the borrower, in order to finance 85 per cent of the goods and services that would be exported from Turkey to Bangladesh, under the LoC, to be issued by a bank nominated by the borrower, to Turkish commercial bank, in favour of the Turkish exporters.
It also said, “The goods, to be exported, should have a minimum Turkish component of 50 per cent.”
According to a message faxed to the Bangladesh mission in Turkey, on April 29, 2012, the rate of interest and repayment period were: Libor plus 3.5 per cent, with up to 10 years maturity, including grace period for construction projects undertaken by Turkish contractors; and Libor plus 3 per cent, with up to five years maturity, for capital goods exported from Turkey to Bangladesh.
According to ERD sources, the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) and the Dhaka Chamber of Commerce and Industries (DCCI) asked the government to use the Turkish LoC for establishing economic zones, ETP plants under BSCIC or the Ministry of Industries, an industrial zone in Savar, coal-based power plants, composite garments or tannery projects whose finished products can be sold back to Turkey, and water supply and sanitation units.
But the business bodies also failed interest to receive any credit from Turk Eximbank as they were yet to fulfil any commitment of last JEC.
During the last JEC, Turkey had declared to set up a local office of Turkish Development Agency (TIKA) in Dhaka to coordinate its development activities in Bangladesh as the two countries eye $3 billion bilateral trade by 2015.
At the briefing, the Turkish labour and social security minister had said, “Real potentials lie upon the young population of both the countries. Majority of our (Bangladesh and Turkey) population is young. It has huge potentials in the following period, if we can translate them into skilled labour.”
According to an ERD media release, the discussions took place in a cordial atmosphere reflecting “the friendly relations between the two countries and the desire to strengthen bilateral economic and commercial relations”. Turkey has expressed an interest to provide long-term support to Bangladesh in petroleum products and LNG export in the public sector.

$250m line of credit

Turkey fails to keep promise

Turkey has failed to implement its commitment of providing USD 300 million line of credit for private sector investment in Bangladesh, even four years after giving the assurance. In 2012, Bangladesh evinced interest in borrowing USD 250 million suppliers credit from Turkey to implement some public-private partnership (PPP) projects. Even Turkeys labour and social security minister Faruk Celik had announced to provide the USD 300million line of credit. The assurance had come at the last Joint Economic Cooperation meeting between the two countries held in Dhaka in November 2012. But since then, the Turkish authorities have not implemented any of the commitments made at the JEC meeting, government sources told The Independent. Sources at the Economic Relations Division (ERD) said the preliminary formalities for the borrowing were almost completed four year ago as Trk Eximbank showed interest to give USD 250 million LoC for implementing PPP projects, especially those in the infrastructure development sector. Even the Turkish government had placed the proposal by Trk Eximbank at its cabinet meeting. On February 29, 2012, a meeting was held at the ERD to discuss the framework of the agreement. Trk Eximbank also sent the draft framework agreement to ERD. Two Eximbank officials assistant general manager (buyers credits) Alaaddin Metin and assistant manager (in charge of Bangladesh) Suzan Ustahad visited Dhaka to negotiate the deal. On April 24, 2012, the Trk Eximbank wrote to the counsel of Bangladeshi embassy in Turkey, Shah Asif Rahman, saying, The loan facility will be provided in accordance with the preference of government of Bangladesh. The selection of the projects, as well as experts or construction firms, will be managed by the Bangladeshi side. The bank also wrote, As Trk Eximbank borrows on floating rates, all of our loans are also offered at floating rates. The rate offered to Bangladesh, and for any other party, is determined in such a way that it does not go below the cost of borrowing of Trk Eximbank. According to the draft framework agreement prepared by the Bangladesh finance ministry, the credit facility would be made available by Trk Eximbank to the borrower, in order to finance 85 per cent of the goods and services that would be exported from Turkey to Bangladesh, under the LoC, to be issued by a bank nominated by the borrower, to Turkish commercial bank, in favour of the Turkish exporters. It also said, The goods, to be exported, should have a minimum Turkish component of 50 per cent. According to a message faxed to the Bangladesh mission in Turkey, on April 29, 2012, the rate of interest and repayment period were: Libor plus 3.5 per cent, with up to 10 years maturity, including grace period for construction projects undertaken by Turkish contractors; and Libor plus 3 per cent, with up to five years maturity, for capital goods exported from Turkey to Bangladesh. According to ERD sources, the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) and the Dhaka Chamber of Commerce and Industries (DCCI) asked the government to use the Turkish LoC for establishing economic zones, ETP plants under BSCIC or the Ministry of Industries, an industrial zone in Savar, coal-based power plants, composite garments or tannery projects whose finished products can be sold back to Turkey, and water supply and sanitation units. But the business bodies also failed interest to receive any credit from Turk Eximbank as they were yet to fulfil any commitment of last JEC. During the last JEC, Turkey had declared to set up a local office of Turkish Development Agency (TIKA) in Dhaka to coordinate its development activities in Bangladesh as the two countries eye $3 billion bilateral trade by 2015. At the briefing, the Turkish labour and social security minister had said, Real potentials lie upon the young population of both the countries. Majority of our (Bangladesh and Turkey) population is young. It has huge potentials in the following period, if we can translate them into skilled labour. According to an ERD media release, the discussions took place in a cordial atmosphere reflecting the friendly relations between the two countries and the desire to strengthen bilateral economic and commercial relations. Turkey has expressed an interest to provide long-term support to Bangladesh in petroleum products and LNG export in the public sector.