ADB offers aid to link Bangladeshi enterprises with global investors

The Asian Development Bank (ADB) can connect Bangladeshi private enterprises with multinational companies that are seeking investment opportunities from trillion-dollar global funds, its officials said in Dhaka today (28 April).

But, they emphasised the need for the acceleration of private sector projects' bankability improvement to scale up foreign financing in the private sector to bridge the gigantic $66 billion gap in annual investments as stated in a UN study.

"To build a favourable framework to attract trillion-dollar funds, Bangladesh needs improvement only in three broad criteria – governance, investment climate, and risk attributes," said Bidyut Kumar Saha, senior investment officer of ADB Private Sector Operations.

In his keynote at the Business Opportunities Seminar in the capital today, Saha said around 95% of ADB exposure is in sovereign lending and the development partner in the past 52 years mobilised $62 billion in cumulative loans and grants for Bangladesh.

However, its private sector operations arm is gearing up with its own funds alongside its strength to link private enterprises with international investors and lenders, he said.

There are many trillion-dollar global funds, multinational companies that are looking for investment opportunities and the ADB can link the Bangladeshi private enterprises with them, Saha said.

In an emerging trend, the ADB had six deals, including equity investments in Bangladesh, last year. Infrastructure in energy and power, water, waste management, transport and ICT is a key area for the ADB to support in Bangladesh.

Financial institutions, agribusiness, healthcare and education, manufacturing and venture capital investments are the areas the ADB is supporting the private sector in Bangladesh.  

"Private sector in Bangladesh accounts for 75%-80% of the GDP, 70%-75% of the annual investments and over 90% export and employment," Saha said, "On the other hand, of the foreign loans, $8-12 billion goes to the public sector while private sector receives $2-4 billion a year."

He continued, "The public sector cannot boost its revenue overnight, development partners have their limitations to lend the government, which increased after Bangladesh's rating downgrade."

Citing the United Nations Economic and Social Commission for Asia and the Pacific study that Bangladesh needs to bridge its $66 billion annual investment gap to achieve its Sustainable Development Goals, he said, "The gap can be best met by investments in the private sector, particularly in forms of foreign direct investment."

The funds, Saha said, are available everywhere, not for Bangladesh. "By accelerating the framework improvement, FDI can be significantly scaled up. It is feasible."

Over 500 participants, consisting of suppliers, contractors, consultants, government officials, representatives of development partners, and members of the diplomatic community, attended the daylong programme.

In separate sessions, ADB officials elaborated on the procurement processes and standards involving ADB-funded projects. There are over $2.3 billion ADB-funded procurement contracts in the pipeline in Bangladesh right now.

ADB Director for Procurement, Portfolio, and Financial Management Department Jesper Pedersen highlighted its efforts to enhance its procedures to better meet the growing and evolving needs of developing member countries, with a strong focus on sustainability, transparency, and quality in procurement.

"The ADB underscores higher skills and efficiency for accelerated project implementation as Bangladesh diversifies its economy, implements reforms to drive economic transformation, and graduates from the least developed country status in 2026," said Country Director Hoe Yun Jeong. He also affirmed ADB's commitment to supporting the private sector.

The ADB's current sovereign portfolio in Bangladesh comprises 51 projects and programmes, valued at over $12 billion.