Asian Development Bank (ADB) and Japan International Cooperation Agency (JICA), the two major co-financiers of Padma bridge project besides the World Bank, have also extended the loan disbursement deadline by three more months.

The new move will keep alive the hope of donor financing for the country’s biggest infrastructure project. The deadline expired last week, ERD officials said.

Earlier, in late January the World Bank, the lead financier of the project, extended its loan activation deadline by six months.

The WB first withheld its funding to the project, after receiving a graft allegation over pre-qualification process of selecting consultants for the project. Later, other financiers also followed the WB.

The WB promised to provide $1.2 billion loan for the $2.9 billion project, while the ADB promised $615 million and JICA $400 million.

Recently, the WB blacklisted the Canadian firm SNC Lavalin, whose name surfaced in the allegations, after finishing primary investigations.

Earlier last month the WB reiterated its stance about their allegations and urged the Bangladesh government to pursue its own investigation into the allegations.

The Daily Sun/Bangladesh/ 1st May 2012

The Ministry of Finance is preparing to issue a total of $500 million sovereign bond in international market to obtain foreign loans from global markets to ease its foreign fund crisis.

“The ministry has taken all kinds of measures including holding talks with a foreign firm to issue bond in international market”, said a senior official of the Macroeconomic Wing under Finance Ministry.

He also said they were following recommendations of a government policy paper on borrowing credit from international securities market through issuing bond amid fund crisis in the European Union countries like Greece and Spain.

The paper was made by a seven-member technical committee headed by Addition Finance Division Secretary Syed Manjurul Islam, which was formed by the government in January on flotation of sovereign bond in international market. The committee submitted its final report to the government last month.

Now, most of the local companies take credits from the international sources with high interest rates, but a standard should be fixed on interest of foreign credits by private sector, the official said.

Now private firms get foreign loan at 10-12 percent interest rates, which are likely to come down to 7 percent after floating sovereign bond by the government.

Sources in macroeconomic wing further said members of the technical committee have already talked to different sovereign bond solution firms to appoint for the country.

As part of the move, Chairman of the body Syed Manjurul Islam talked with a director of Singapore-based Sovereign Solution Limited last week. The firm also works for the Bangladesh chapter of Standard Chartered Bank.

Regarding floating of the bond, Bangladesh Bank Governor Dr Atiur Rahman told daily sun last week that international credit rating firms would start working from next month to assign their ratings to Bangladesh.

After getting new ratings, the government will float sovereign bond in the international market, he added.

Stable monetary and fiscal management of Bangladesh earned Ba3 (Moody’s) and BB-(S&P) sovereign ratings with stable outlook for two consecutive years of 2010 and 2011.

According to a policy paper, to attain foreign loan through sovereign bond, the foreign loans to be borrowed under the proposed sovereign bond must not be spent on financing the regular budget deficit of the government, but on large infrastructure projects that offer scopes for revenue earnings.

It also said ensuring the maximum utilisation of the fund, collected through the bond, would be a daunting challenge for the government.

Because, strict conditions and intensive monitoring of the loan issuing authorities, particularly the development partners in case of projects under concessional loan, will not be in place for the projects, to be implemented with fund borrowed through sovereign bond.

The paper strongly suggested finalisation of the projects before issuing sovereign bond in the international market to maximise the utilisation of the money.

The technical paper, first of its kind in the country, was prepared as the government is seriously planning to float sovereign bond in the global markets soon to help ease pressure on foreign currency reserve and improve balance of payments (BoP) situation.

The bond may be issued for five to 10 years. The minimum amount to be borrowed could be $500 million, the paper suggested.

According to the policy paper, the total global bond market in 2011 was worth $221 billion. Of the total, $9.0 billion was borrowed by a number of Asian countries, including Sri Lanka, Indonesia, Malaysia, Vietnam and the Philippines.

The Daily Sun/Bangladesh/ 1st May 2012

Akhtaruzzaman Chowdhury

Akhtaruzzaman Chowdhury has been re-elected as the chairman of United Commercial Bank (UCB), the Bank said in a statement yesterday. He is a founder director of the Bank.

Chowdhury is also serving as chairman of the parliamentary standing committee on the textiles and jute ministry.

Showkat Aziz Russell, a top entrepreneur, has been re-elected as vice-chairman of the Bank.

MA Sabur has been re-elected as the chairman of the executive committee, and Md Jahangir Alam Khan as chairman of the audit committee.

The Daily Star/Bangladesh/ 1st May 2012

Quazi ASM Anisul Kabir

Quazi ASM Anisul Kabir has been promoted to deputy managing director of Prime Bank ltd recently, said a statement yesterday.

He was serving as a senior executive vice president and head of Motijheel branch of the Bank prior to the promotion. Kabir started out in banking with Islami Bank Bangladesh Ltd in 1986 and has been with Prime sine 1995.

Kabir has extensive and varied experience in the field of banking. He is a postgraduate in Geology from the University of Dhaka and has an MBA from Bangladesh Open University.

The Daily Star/Bangladesh/ 1st May 2012

Md Mahmudul Hoque

Md Mahmudul Hoque has been elected as the new chairman of Jamuna Bank, the Bank said in a statement yesterday.

Hoque is also the chairman of Anlima Group and Precission Energy Ltd.

The Daily Star/Bangladesh/ 1st May 2012