Financing >> Public-Private Infrastructure Development Facility (PPIDF)

The Asian Development Bank (ADB) has provided the GOB with a fund of $165 million from ADB's OCR and ADF. The design of the PPIDF facility is based upon the earlier IDA facility of IDCOL under the PSIDP.

This facility was setup to enable Bangladesh to utilize its potential in becoming a transport and transshipment hub for the sub-region. Domestic private investment in infrastructure has been limited due to the dearth of long-term financing for such investment.

Despite the GoB's continuous effort to attract private sector investments, sufficient private commercial financing is not yet available because of various factors, including low rating of debt, a general perception of high cost of doing business in the country, and the absence of creditworthy public sector entities.

The proposed Facility will help address these constraints by providing scarce long-term debt financing for private sector sponsored infrastructure projects. As per the lending policy of IDCOL, the proposed Facility will provide loans covering up to 40% of the project cost while the project sponsor will be required to invest a minimum of 20% of the total project cost as equity thereby achieving a better risk sharing between the project sponsor and the government via IDCOL.

The proposed facility will therefore play a catalytic role in attracting other commercial funding sources in filling up the financing gap as commercial banks and domestic capital markets are currently not able to provide enough long-term project financing. The project will facilitate and catalyze public-private partnership (PPP) projects, mobilize private sector capital and expertise for infrastructure development, and ease the burden of infrastructure investment on the public sector budget of the GoB.

The project will facilitate and catalyze public-private partnership (PPP) projects, mobilize private sector capital and expertise for infrastructure development, and ease the burden of infrastructure investment on the public sector budget of the GoB.