'Develop bond market as source of infrastructure financing'

Strategies for long term sustainable infrastructure financing to face future challenges

Dhaka, Oct 31 :  Speakers at a webinar on Sunday urged a long term infrastructure financing plan and development of bond market to meet the infrastructure gap through alternative source of financing in the country.

They also focused on strategies for long term sustainable infrastructure financing to face future challenges of investment and employment in Bangladesh.

 They were addressing a webinar on “Bridging the infrastructure gap through credit solutions in Bangladesh” jointly organized by Dhaka Chamber of Commerce & Industry (DCCI), and GuarantCo under the Bangladesh Trade & Investment Summit 2021.

 Chief Guest of the webinar Salman F. Rahman, Private Industry and Investment Adviser to the Prime Minister, said that government’s main job is to play a role of facilitator for the private sector to act properly.

 The present government has opened up almost all the sectors like power, airlines, televisions, mobile, banking, insurance, universities to be operated by the private sector, he said.

 “Right at this moment there is a huge surplus liquidity in the banking sector. If we could have been able to divert this liquidity into bond that would be helpful,” he added.

 For long term sustainable infrastructure financing more and smart strategies are required, he said.

 Special Guest Md. Nojibur Rahman, Chairman, Capital Market Stabilisation Fund and former Principal Secretary to the Prime Minister, said there is a boom of infrastructure development in Bangladesh.

 “We need capital and long term finance. Domestic finance is not enough for that. Guarantco is doing well in this regard. Bangladesh Bank and regulatory bodies are very supportive now and this is a positive sign for the private sector,” he said.

 Bangladesh’s private sector is very vibrant now and the political will of the government for private sector is very positive to move the engine of growth, he said.

 “Capital market has a big role to play. Taka bond has already been issued in the London Stock Exchange and SUKUK bond has come into play. These are all positive signs. We need mixed approach," he added.  

 DCCI President Rizwan Rahman said infrastructure is critical enabler of compounding industrialization and economic development.

 Substantial investment in infrastructure is needed to accelerate trade and economic growth

 To improve infrastructural competitiveness, investment is being made in wide-ranging infrastructure projects though they are relatively inadequate, said Rizwan.  

 “Our infrastructure development has been heavily reliant on public sector financing which hovers around 4 per cent to GDP whereas most of our neighboring economies maintain it within 5 per cent to 10 per cent. Lack of long-term and alternative financing solutions holds back the private sector role in the infrastructure development,” he added.

 Andrew Bainbridge, Chair of Private Infrastructure Development Group (PIDG) said that mobilizing the private sector is very critical enabler of growth.

 “We work across the project life cycle through deploying grants, equity, long term debt and guaranty even in local currency. We are here to support nations and people to achieve their ambitions. Investment of their US $ 4.4 billion over the last 20 years has actually mobilized $35 billion,” he said, reports UNB.