The International Finance Corporation is providing $30 million to Pran Dairy Ltd (PDL) and Habiganj Agro Ltd (HAL) to support them amid the severe impacts of the US dollar shortage in Bangladesh.
This marks the first of the IFC’s US dollar loans to be used as working capital in Bangladesh, enabling PDL and HAL, two concerns of Pran Group, to sustain their operations, increase exports, and preserve more than 30,000 jobs, the IFC said in a press release on Sunday.
According to the IFC, the food and beverage sector, a key pillar of Bangladesh’s economy, accounts for around 13 percent of the manufacturing production in value and employs 19 percent of the industrial workforce with a projected compound annual growth rate of 12 percent.
“However, the current scarcity of foreign exchange, higher energy prices, and power shortages in the country have disrupted the import of raw materials and constrained local commercial banks’ lending ability.”
Against this backdrop, IFC’s longer-term US dollar financing will help improve access to foreign exchange, supporting Bangladeshi companies to navigate the crisis.
“By providing scarcely available US dollar working capital, the IFC will help ensure the long-term stability of the company’s operations and allow us to contribute to the country’s economic stability,” said Uzma Chowdhury, director of finance at Pran-RFL Group, in the press release.
The IFC said as part of its advisory services, it will also support Pran Group to develop the company’s smallholder sourcing supply chain and identify opportunities to de-carbonise its agro-processing operations.
Martin Holtmann, the IFC’s country manager for Bangladesh, Bhutan, and Nepal, said the financing aims to ease the current lack of access to foreign exchange while enabling private sector growth in Bangladesh.
“By backing PRAN Group, the IFC will also contribute to diversifying Bangladesh’s export base, which is key for creating jobs, expanding market opportunities and enhancing economic resilience.”
Since 2010, the IFC, a member of the World Bank Group, has invested more than $3.8 billion in Bangladesh.
Source: thedailystar
