Washington, US (BBN)-The International Finance Corp, the private lending arm of the World Bank, is planning to invest in two prominent companies in Bangladesh to give a fillip to the government’s efforts in upgrading the country’s dilapidated infrastructure and diversify its exports.
IFC is considering a convertible loan investment of up to $170 million, along with other co-investors, in Summit Corporation Ltd (SCL), one of the largest companies in the country, reports the Deal Street Asia.
It is owned by the Khan family, and led by chairman Muhammed Aziz Khan.
The family will create a Singapore-based holding company, and IFC’s investment will be made into that.
The investment will be towards Summit’s proposed 715 MW power projects over the next three years.
This would be a substantial addition to the country’s poor power infrastructure, where more than a quarter of its 159 million inhabitants do not have access to electricity.
IFC had previously financed SCL’s Khulna Power Plant in 1999 and Bibiyana II Project in 2015.
The other IFC investment is in Walton Hi-Tech Industries Ltd., a maker of refrigerators, air conditioners and motor cycles.
It is part of the Walton Group, a leading consumer electronics, electrical and automobile products manufacturer and merchant in Bangladesh.
The group is planning to expand its manufacturing operations, and modernize its existing plant for which IFC is planning to lend $20 million.
The total cost of the project is expected to be $70 million to be financed with a mix of debt and equity.
Located in Chandra, Kaliakor, Gazipur, around 25 miles north of capital Dhaka, the project is expected to create about 800 jobs after it becomes operational.
It will also help the company increase its exports of refrigerators, which in turn will help the country diversify its exports basket.
Currently, apparels constitute 80 per cent of Bangladesh’s $3.2 billion of exports, and the sector is coming under increasing competition from Vietnam, another low-cost maker of apparel.
Exports have also been hit by continued economic slowdown in the European Union, the country’s largest export market.