The World Bank on Friday (June 5, 2015) approved a total of $476 million for two projects in Bangladesh to develop a strong financial sector and to improve agricultural productivity for one million poor farmers.

The projects approved by the Bank's Board of Executive Directors are $300 million for the Financial Sector Support Project and $176.06 million for the Second National Agricultural Technology Programme.

The credits are from the International Development Association (IDA), the World Bank's concessional lending arm.

They have 38 years to maturity with a 6-year grace period and carry a service charge of 0.75 percent, said a press release.

"These two projects will support Bangladesh to reach middle-income status by strengthening the financial sector and ensuring greater food security.

These, in turn will create more and better jobs," said Johannes Zutt, World Bank Country Director for Bangladesh.

"Bangladesh has made remarkable progress in reducing poverty in the last decades. But Bangladesh has the potential to achieve higher growth if it addresses bottlenecks holding back economic development." he added.

The Financial Sector Support Project (FSSP) aims to improve financial market infrastructure, the regulatory and oversight capacity of the Bangladesh Bank, the country's central bank, and the access to long-term financing for private firms in Bangladesh.

The 2013 Doing Business report identified access to affordable finance among the top four obstacles for doing business in Bangladesh.

The project will enable the participating financial institutions to provide long-term financing to manufacturing and export intensive firms.

The availability of long-term financing of up to five years to the private sector, and in particular to the readymade garments, footwear and light engineering sectors will spur competitiveness, investment, and growth.

The financing institutions will lend at commercially determined rates and also offer Shariah-compliant financial products.

"By providing access to long-term finance, the project will help build a market for long-term lending in Bangladesh. The project will also provide technical assistance for capacity building of the financial institutions and industry associations." said Shah Nur Quayyum, Task Team Leader, Financial Sector Support Project, World Bank.

FSSP will help strengthen Bangladesh Bank's supervisory and oversight functions to mitigate financial sector risks.

The project will also support strengthening the financial infrastructure, including the payments system, credit reporting systems, and other areas.

The Second National Agricultural Technology Program (NATP II) aims to support some one million poor, small and marginal farmers in 57 districts.

These small-scale farmers will benefit from stronger linkages with research, on-farm demonstrations of improved technologies, training and skills development, agricultural extension services, and co-funding productive assets.

The project aims to increase and diversify agricultural production, and ensure the poor farmers' access to markets. The project seeks to increase agricultural productivity of crops, livestock and fisheries. The project will continue the formation of farmers' groups, 35 percent of which would consist of women.

"The project builds on the lessons learnt and the success of the first NATP project. The World Bank, along with other development partners, has long promoted agricultural technology and its adaptation to farmers in Bangladesh," said Patrick Verissimo, Task Team Leader, NATP II, World Bank "The project would promote an integrated approach to help to achieve food security, adapt to climate change and enhance nutrition through safer and more diversified food."

The project will improve the country's agricultural research system through adopting a demand-driven, market-oriented and decentralised approach to agricultural research and strengthening agricultural research institutions.

NCC Bank
The bank has informed that the 30th AGM of the bank will now be held on June 24, 2015 at 10:30am instead of 11:30am. Other information of the AGM will remain same.

Uttara Bank
Credit Rating Agency of Bangladesh Limited has announced the rating of the bank as AA3 in the long term and ST-2 in the short term along with a stable outlook based on audited financial statements of the bank up to December 31, 2014 and other relevant quantitative as well as qualitative information up to the date of rating declaration.

Bd Welding Electrodes
Trading of the shares of the company will remain suspended on record date today.

Khulna Power Company
Q1 un-audited: net profit after tax from January 2015 to March 2015 was Tk 831.89 million with EPS of Tk 2.30 as against Tk 140.38 million (KPCL-I only) and Tk 0.39 respectively for the same period of the previous year.

Wata Chemicals
The company has informed that due to unavoidable circumstances, the 33rd AGM of the company will now be held on June 20, 2015 instead of June 11, 2015 at 11:00am at factory premises, Murapara, Rupganj, Narayanganj. Other information of the AGM will remain same.

Asian Development Bank, International Finance Corporation, and Islamic Development Bank signed loan documents on Tuesday to provide $210 million financing to Summit Bibiyana II Power Company Limited (SBIIPCL), a company set up by Summit Industrial and Mercantile Corporation (Pvt.) Limited (Summit), and GE Energy, LLC (GE), for a 341 MW gas based power plant in Sylhet.
The direct loan amount is the largest given to a Bangladeshi private sector project by any of the three development agencies. This will be the largest project finance transactions development by a Bangladeshi company. The proposed investment also fits well with the regional development strategy of three multilateral development banks.
Of the total loan amount, the ADB is going to finance $75 million to a private sector gas-fired power plant in Bangladesh to help the country overcome severe power shortages.
A financing agreement was signed on Tuesday in this regard for Summit Bibiyana II Power Company Limited, a joint venture between Summit Industrial and Mercantile Private Limited and General Electric Energy.  
Prime Minister’s Energy Adviser Dr Tawfiq-e-Elahi Chowdhury, Summit Group Chairman Aziz Khan, Director Ayesha Aziz Khan were present.
“The project will benefit households, business and industry by improving access to electricity,” said Hayato Hoshi, senior investment specialist with ADB’s Private Sector Operations Department.
“It will also help further promote private sector investment in Bangladesh’s energy sector where few major independent power producers of this size have materialised in the last decade,” he added.
Because of frequent power outages, many industrial and commercial businesses depend on inefficient and expensive alternatives of generating electricity, such as burning diesel or oil.
The power shortages also caused periodic load shedding and adversely impact the country’s economic growth and poverty reduction efforts.
To address power deficits, the government has a master plan to develop 12,000MW of additional power capacity over the next five years to meet demand, increase its electrification rate and diversify its fuel sources including renewable energy.
The Bibiyana II Gas Power Project involves the design, engineering, construction, and operation of a 341MW combined-cycle gas-fired power plant to be located on the south bank of Khushiyara river, some 180kms northeast of Dhaka.
Its construction is expected to be complete by October 2015, and the plant will produce around 2,500 GW-hours of power annually.
Summit Industrial and Mercantile Private Limited, a leading local independent power producer, has 80 percent stake in Summit Bibiyana II Power Company Limited, while General Electric Energy, a well-developed global business in gas fired power projects holds 20 percent stake.
The company entered a 22-year power purchase agreement to sell all electricity generated from the project exclusively to the Bangladesh Power Development Board, the country’s state-owned electricity company.
‘Bibiyana II is producing the lowest cost electricity and will provide the most important requirement for industrial growth to the country. Summit will keep working to provide electricity to eradicate poverty and bring about inclusive sustainable growth for the people of Bangladesh with its strong financial and management strength. We have raised more than $500 million from foreign lenders over last four years’ said Ayesha Aziz Khan, Director of Summit Group.
‘IFC is proud to be part of this project because our investment will send a positive signal to other private sector players in Bangladesh, who are planning to develop efficient power projects aimed at expanding access to power,’ said HyunChan Cho, IFC Regional Industry Head for Infrastructure and Natural Resources.
‘Apart from meeting the power demands of the country, the project is providing reliable employment opportunity during construction and operational phases,’ said Tariqur Rashid, DMD of Summit Turbine Division.
‘For IDB, this is part of its commitment for infrastructure development in its member countries and is extremely pleased with this support to the private sector participation in the power generation capacity of Bangladesh,’ stated Dr. Walid Abdelwahab, Director Infrastructure at Islamic Development Bank.

News:Daily Sun/4-Jue-2015

The government is likely to reduce the corporate tax for financial institutions, even though the move would lead to revenue losses of about Tk 1,000 crore.

About 60 percent of the corporate tax comes from financial institutions, who have been demanding a cut for several years.

But the government is finally caving in to their demand, hoping the banks will go on to reduce the lending rates, which would then perk up the stagnant investment scenario, finance ministry officials said.

The corporate tax may be lowered to 40 percent from the existing 42.5 percent in the upcoming fiscal year.

Given the higher capital requirements from 2016 and the rising default loans and the accompanying provisioning, a cut in corporate tax would take some pressure off them, banks said.

The government is also considering cutting the corporate tax for listed and non-listed companies by around 2 to 2.5 percentage points, the officials said.

All that begs the question: how will the government offset the revenue loss?

Furthermore, the government is likely to set the revenue target for upcoming fiscal year at Tk 176,370 crore, which is an increase of about 31 percent over the current year's.

The government's revenue earning will increase by a big amount automatically thanks to GDP growth and inflation, said an official of the National Board of Revenue.

By intensifying its monitoring, it would collect another Tk 10,000 crore to Tk 12,000 crore. A good number of items will be added to the existing list containing 58 from which advance income tax is collected.

VAT will be increased for many items. Several items that get VAT exemption or lower rates at present will have to pay regular VAT in fiscal 2015-16. Small retailers currently enjoying package VAT, and save for the ones at the upazila level, may see their privileges withdrawn next fiscal year.

At present, the 5 percent advance tax is not deducted from 211 items at the import level. But in the upcoming budget, some essential products including rice, grain, onion, lentil, lifesaving medicines are likely to be taken off the list.

Garment entrepreneurs will have to pay 0.8 percent source tax on their exports instead of the existing 0.3 percent.

Other exporters, who now pay 0.6 percent tax at source, might have to pay 1 percent in the upcoming fiscal year.

The tax authority is looking to log in an additional Tk 3,000 crore from the increase in source tax on exports, officials said.