Govt looks for alternative foreign funds

Hasibul Aman

15 December, 2019 12:00 AM printer

The government is in search of alternative foreign funds for development projects alongside their regular inflow in a bid to meet greater financing needs in near future.  

Policymakers are going to sit this month to find means of more overseas funds including public-private partnership, official sources informed.

The meeting is slated to be held at Prime Minister’s Office (PMO) on December 18 with Dr Mashiur Rahman, Economic Affairs Adviser to the Prime Minister.

Letters have already been sent to some important ministries and divisions, asking their suggestions on the issue.

The Planning Commission estimate suggests that Bangladesh will require $928.48 billion additional financing during FY’17 to FY’30 to implement the UN sustainable development agenda.

Of the amount, nearly 15 percent will be external financing of which nearly 10 percent will be foreign direct investment and nearly 5 percent will be aid and grants. FDI requirement will stand at $6 billion per year.

“In this context, the initiative is timely and the meeting is very important. The upcoming 8th five-year plan is also putting special emphasis on alternative financing for development projects,” said General Economics Division (GED) Member Dr Shamsul Alam.

For the meeting, the PMO has identified some key areas for discussion, including preparing basic concept note and indicative guidelines for PPP projects to help select which projects will go under PPP. 

Specifying instruments like long-term bonds and others means of capital collection from the market for PPP investment, investment by insurance companies according to company laws and project preparation and approval process are the other key issues.

PMO has sent letters to finance division, banking and financial institution division, economic relations division (ERD), physical infrastructure division of planning commission and the PPP Authority.

In the ongoing 7th five-year plan, the government puts special focus on PPP projects. Besides, PMO has a directive for implementing 30 percent of ADP projects under PPP. However, the pace of PPP initiatives is yet to get momentum in the country. 

Economic analysts also suggested finding alternative development project financing including PPP, floating sovereign bonds in the international market and knocking at other windows of existing lenders.

But those will require a lot of work to make available alternative funds for local development schemes, they observe. 

In addition, they also suggested stepping up efforts to utilise more foreign aid in the pipeline alongside finding alternative funding.