Development bank backs Bangladeshi PPPs and green energy

19 Jul 17

The Asian Development Bank (ADB) has approved a $526m multitranche financing facility for infrastructure investments in Bangladesh.

It will focus on public-private partnership projects and renewable energy, split between a $500m market-based loan for the former and a $26m concessional loan for the latter.

The bank also approved a $750,000 technical assistance programme to strengthen the capacity of the state-owned Infrastructure Development Company to promote and finance PPP projects.

ADB principal financial sector specialist Peter Marro said: “Infrastructure development is an integral part of Bangladesh’s rapid economic growth, but it is undeniable that in order to sustain this growth, the country would need an increased investment in infrastructure that can be filled in by the private sector.”

The bank said Bangladesh had recorded steady average growth of 6.3% in 2011-15, enabling it to reach lower-middle income status in July 2015.

Real gross domestic product growth would though need to reach an average annual rate of 7.4% during the country’s current five-year plan to move Bangladesh toward upper middle-income level.

This would entail a substantial increase in public and private investments from about 29% of GDP in 2015 to 34.4% by 2020.

The bank put the gap in infrastructure financing alone at between 5% and 6% of GDP, equivalent to a shortfall of $9-10bn a year.

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