In an inaugural session of the launching of the 2nd phase of the Investment Promotion and Financing Facility (IPFF) project finance minister AMA Muhith on Tuesday urged the private sector to invest over Tk 10 trillion as envisaged in the Sixth Five-Year Plan (SFYP).
“The private sector should consider how to develop their capacity of meeting the big challenge of investing over Tk 10 trillion during the plan (SFYP),” he said at the inaugural session of the launching of the 2nd phase of the Investment Promotion and Financing Facility (IPFF) project.
Bangladesh Bank Governor Dr Atiur Rahman and Finance Division Secretary Dr Mohammad Tareque also spoke at the session as special guests. World Bank’s acting country director Tahseen Sayed was the guest of honour while IPFF project director Shitangshu Kumar Sur Chowdhury gave the welcome address.
Speaking as the chief guest, the finance minister said the challenge ahead of the country for the SFYP is much bigger as it projected an investment of over Tk 13 trillion over the five years of the plan period beginning from June 2010.
“Of the required investment of more than Tk 13 trillion, only Tk 3 trillion will come from the public sector while over Tk 10 trillion is required from the private sector to implement the plan,” he added.
He observed that the IPFF project would have to mobilise such huge private sector investment although so far it could generate only some small investments.
Muhith said they are trying to stabilise the stock market as well as to mobilise the equity for future investments.
He noted that before an investment project gets approval, three things would have to be ensured – the project should be technically sound and financially viable, and the contract legally acceptable.
Atiur Rahman said a Tk 4.22 billion allocation for the first phase of the IPFF, initiated in 2006, has been utilised fully in financing the Participating Financial Institutions (PFIs) for their lending to seven private sector power generation plants adding 178 MW of power to the national grid.
He also added that the 2nd phase of the IPFF is going to be larger, with the World Bank and the government contributing US$ 250 million and taka equivalent of $ 50 million respectively in lending funds and another $ 7 million coming from the World Bank as technical assistance.
“The IPFF is thus of particular significance for our efforts of accelerating our economic growth, redressing deficiencies in physical infrastructure to facilitate and hasten new investments in manufacturing, services and commercial farming,” he added.
Finance Division Secretary Dr Mohammad Tareque termed “under investment in physical infrastructure” as the main constraint in Bangladesh’s dream to go for a higher path of growth in the next 10 years.
He opined that the IPFF will be a real success if capacity building is ensured within the private sector, financial sectors and investors themselves.
Tahseen Sayed, the acting country director of the World Bank, said though financing the huge programmes or projects, they are often criticised as the results are not evident.
Saying that the government’s steps are in the right direction for the Public-Private-Partnership (PPP) initiative, she said the PPP could work to fill the huge infrastructural gaps in the country.
Bangladesh Bank is implementing the IPFF project under the Finance Division, providing fund for financing PPP ventures in a wide range of infrastructure sectors.
So far, the IPFF project has provided Tk 422.33 crore to increase total power capacity in Bangladesh adding 178 MW to the national grid.
Under the 2nd phase of the IPFF project, Tk 2,100 crore ($ 300 million) is available for financing the eligible PPP projects