Signs $112mn credit for 100MW power plant

Francois de Maricourt, Chief Executive Officer, HSBC Bangladesh, and Md Shahinul Islam Khan, Chairman, BPDB, exchange documents after signing an agreement at a ceremony in Dhaka recently.

Bangladesh Power Development Board (BPDB) has recently signed agreements for $112 million ECA (Export Credit Agency) backed credit facilities to support construction of a 100MW HFO-based power plant in Chapainawabganj in the country.
Francois de Maricourt, Chief Executive Officer, HSBC Bangladesh, Md Shahinul Islam Khan, Chairman, BPDB, Board Members of BPDB and senior officials from both the organisations were present at the signing ceremony.
The Hong Kong and Shanghai Banking Corporation Limited (HSBC) is acting as the mandated lead arranger of this credit facility. BPDB is responsible for major portion of generation and distribution of electricity mainly in urban areas except Dhaka and west zone of the country.
The Board is under the Power Division of the Ministry of Power, Energy and Mineral Resources, Government of Bangladesh.
HSBC has previously arranged financing for BPDB and its subsidiaries to implement two other important power projects in Bangladesh.

Khandaker Anwar Ehtesham has recently been selected as advisory council member of CMO-Asia's World Brand Congress.

Ehtesam, currently the head of communications and branding division at Dhaka Bank, was awarded as one of the 100 most talented “Global Marketing Leaders” by World Marketing Congress in 2014, Dhaka Bank said in a statement yesterday.

He brings almost a decade of professional experiences in advertising, brand management, public relations and qualitative research, according to the statement.

Ehtesam joined the “Festival of Media – Asia Pacific 2015” marketing event as the first Bangladeshi judge to evaluate 46 renowned global companies. Festival of Media is a strategic concern of C Squared Brand and M&M Global, according to the statement.

The World Bank is set to extend long-term low-cost loans to private sector firms, including those from garments, footwear and light engineering sectors, in a bid to brighten the country's stagnant investment scenario.

A $300 million fund is likely to be provided to Bangladesh, the approval for which is due from the multilateral lender's board in the first week of June.

The rate of interest on the loan would be LIBOR plus 3-4 percent and the credit would be given for five years.

The WB said the country is in want of long-term financing that is critical for investment and growth -- and the gap needs to be filled.

At present, there is a “significant demand” for long-term financing by eligible and bankable firms, the supply for which has not been matched by the market.

Market analysis and discussions with stakeholders indicated that one of the major impediments to expansion of long-term financing is the absence of supply of such financing.

For instance, last year, only 30-35 of the 6,000 such firms managed dollar-based long-term financing, the lender said.

While those firms were large in size, the multilateral lender is looking to reach out to mid-sized firms through the programme. Part of the problem at present is the absence of long-term deposit instruments in the financial institutions, which the project seeks to address through technical assistance to develop long-term deposit instruments and the pension market.

Information asymmetries and the banks' lack of capacity and risk aversion, which further exacerbates the limited supply of long-term finance, will also be tackled through the sector wide technical assistance.

The programme will require a total of $350 million and the government will contribute with $50 million.

Of the amount, $291 million will be used for supporting long-term financing for the private sector, $1.25 million for technical assistance such that the firms go on to develop as competitive institutions, $50 million for strengthening the financing market infrastructure, and $5 million for strengthening the capacity of the regulator. The proposed project is particularly looking to increase the long-term bank financing for the manufacturing sector, especially those involved in exports, and small and medium enterprises.

The programme is expected to have a positive impact on the overall growth of firms, economic growth, employment and poverty reduction. The long-term finance line will be channelled by the Bangladesh Bank.

The credit line will provide banks with access to longer-term resources for on-lending to firms. It will help firms access the term lending (expected average of five years) that is required for capital formation and technological upgrade, facilitating the growth, productivity and competitiveness of firms.

M Shahidul Islam, Additional Managing Director of United Commercial Bank Limited (UCBL) receiving the 'Gold Trade Award 2014' from Maumer Mesak, Relationship Manager, Financial Institutions, Commerzbank AG at a programme in presence of Mirza Mahmud Rafiqur Rahman, Additional Managing Director and Mohammad Shawkat Jamil, Deputy Managing Director of UCBL recently for maintaining 'excellent partnership' in Trade Finance in the year 2014.

Experts and stakeholders spoke in favour of revising the bank's exposure to the capital market and extension of timeframe for adjusting over exposure for bringing back normalcy in the capital market.

They also said the securities regulator should ensure proper utilisation of IPO (initial public offering) funds for the sake of investors' interest as well as the companies' growth.

They were speaking at a seminar titled 'Bangladesh's Economy and Prospect of Capital Market' jointly organised by Chittagong Stock Exchange (CSE) and a vernacular daily at a city hotel Monday evening.

Dr. Mashiur Rahman, Economic Affairs Adviser to the Prime Minister, said the capital market may face problems if the banks' investments are withdrawn rapidly.

"Banks' investments made in non-listed securities are included in exposure limit whimsically. It is also out of logic to include banks' equity investments, made in subsidiaries, in their exposure," Mr. Mashiur said.

He stressed on diversification of investors' portfolios, long term investment and investments based on sufficient funds.

Dr. AB Mirza Azizul Islam, a former adviser to the caretaker government, said the demand of revising the strategy of calculating the bank's exposure to the capital market deserves consideration.

"The inclusion of bank's investments, made in non-listed securities, in the exposure is out of my thought," said Mr. Islam, who has also stressed on the quality of IPO rather than quantity.

Mr. Islam, also the former chairman of the securities regulator, said the regulator should look into the use of IPO funds as investors are being deprived of dividends.

The central bank has asked the banks to adjust their over exposure by July, 2016.

M A Mannan MP, the State Minister for Finance and Planning, said reforms have been accomplished by the securities regulator for the development of the capital market.

"The size of our economy is increasing gradually. The issue of economic growth should be prioritised by solving other problems gradually," Mr. Mannan said.

Another former chairman of the securities regulator Faruq Ahmad Siddiqi said the timeframe of adjusting over exposure should be extended considering the dept of banks' over exposure.

The chairman of the securities regulator Prof. M Khairul Hossain said the incumbent regulator brought many reforms in the securities rules along with introducing market surveillance software.

"The capital market plays a role in maintaining social disciplines. Other stakeholders such as merchant banks and asset management companies have also role in ensuring due diligence in IPO issues," Mr. Khairul said.

CSE Managing Director Wali-ul Maruf Matin made his keynote speech at the very beginning of the seminar.

In his speech Maruf highlighted recent developments in the country's economy.

CSE chairman Dr. Muhammad Abdul Mazid, ICB Managing Director Md. Fayekuzzaman, Bangladesh Insurance Association chairman Sheikh Kabir Hossain, DSE managing director Dr. Swapan Kumar Bala, ICAB President Masih Malik Chowdhury, Meghna Bank managing director Mohammed Nurul Amin, among others, spoke at the seminar.