BBML signs fourth financing deal with DEG

Banga Building Materials Ltd (BBML), a concern of PRAN-RFL Group, has signed its fourth financing agreement with DEG – Deutsche Investitions- und Entwicklungsgesellschaft mbH, a German development finance institution.

BBML began commercial manufacturing operations in 2008 at its industrial park in Shayestaganj, Habiganj. Since then, the company has expanded its product portfolio to include PVC doors, fittings, electrical switches and sockets, fans, energy-saving bulbs, melamine products, stationery, OPAL products and recycled plastic items.

DEG, a subsidiary of the KfW Group, provides long-term financing and advisory services to private companies in developing and emerging countries to promote sustainable economic growth and private sector development. Established in 1962, it offers loans, equity and business support services, contributing to the achievement of the UN Sustainable Development Goals.

DEG has been a financing partner of BBML since 2013. The newly signed fourth loan agreement will support the expansion of BBML's operations, particularly increasing the output of recycled products and soft PVC items such as PU leather, floor mats and PVC ceiling boards. The project will also introduce new export-oriented products, including household cleaning brushes, targeting the US and European markets.

The total project cost is $29 million, of which DEG will finance $25 million to cover the import of capital machinery and raw materials. The loan will be partially guaranteed by the European Union's EFSD+ (European Fund for Sustainable Development Plus), the EU's key financial tool under its Global Gateway Initiative to mobilise sustainable investments in partner countries.

BBML currently employs around 9,500 people. The expansion at its Habiganj Industrial Park is expected to create an additional 1,000 jobs.

The signing ceremony was held on Thursday at PRAN-RFL Group's head office in Dhaka. Uzma Chowdhury, Director (Corporate Finance) of PRAN-RFL Group, and Parvez Akhter, Vice President, Industries and Services, Asia, DEG, signed the agreement on behalf of their respective organisations.

Ahsan Khan Chowdhury, Chairman and CEO of PRAN-RFL Group, said, "We are delighted to have DEG as our partner and adviser. DEG's continued support strongly endorses our vision. This financing will help us produce import-substitute products while creating employment opportunities in rural areas."

Monika Beck, Chief Investment Officer and Member of the Management Board of DEG, said, "DEG is committed to fostering sustainable private sector development in emerging markets, including Bangladesh. Our long-standing partnership with Banga Building Materials reflects our shared commitment to sustainable growth."

Michal Krejza, Minister Counsellor and Head of Cooperation at the European Union Delegation to Bangladesh, said this marked the first EU guarantee for a private sector loan in Bangladesh and reflected the EU's objective to work more closely with private businesses to drive innovation and job creation under the Global Gateway Initiative.

Ulrich Kleppmann, Counsellor and Head of German Development Cooperation at the German Embassy in Dhaka, RN Paul, Managing Director of RFL Group, Hubert Blom, Attaché and Programme Manager at the European Union Delegation to Bangladesh, Fahmeda Ahmed, Country Representative of DEG for Bangladesh and Nepal, Faiyaz Hossain, Investment Manager of DEG, and Shams Arefeen, Analyst of DEG, were also present.