Offer more funds to plug infrastructure gaps
Bangladesh needs huge funds to develop its ailing infrastructure but the private players have hardly shown any interest to chip in due to a lack of policy support from the government, said analysts yesterday.
“The private sector is keen to invest in the power sector in Bangladesh alone,” said Wendy Jo Werner, country manager of the International Finance Corporation, at a seminar organised to mark the 60th anniversary of the Dhaka Chamber of Commerce and Industry.
But the country needs investment of $136 billion in roads infrastructure, $25 billion in economic zones and $26 billion for water sector development, she said.
In the power sector, Bangladesh needs $60 billion in investment to ensure generation of 30,000 megawatt of electricity by 2030.
She emphasised on the development of airports and ports, particularly the Chattogram port, as they are directly involved in exports.
Bangladesh loses $3 billion annually due to traffic congestion, while only 15 percent people have access to clean drinking water. The country needs investment of $320 billion in the infrastructure sector over the next 12 years.
“The private sector is extremely important to fill the gap in investment,” Werner added.
Nishant Kumar, executive director (Asia), GuarantCo. Singapore office, suggested mobilising funds from the non-banking sector like life insurance companies and overseas financial institutions to meet the needs for infrastructure development.
There is a lack of knowledge on financing options available overseas for infrastructure projects amongst the Bangladeshis, he said, while calling for a vibrant bond market too.
The banking system is not interested in providing support to the infrastructure sector because of the long-term nature of the projects, said Syed Mahbubur Rahman, managing director and chief executive officer of Dhaka Bank.
Like Kumar, he too suggested collecting funds from the non-banking system and by issuing bonds in the market.
“The government should provide sovereign guarantee to attract foreign investors to the infrastructure sector,” Rahman added. M Fouzul Kabir Khan, former secretary of the power division, alleged the development projects being undertaken by the government have turned into a channel to provide political financing to party activists.
Selim Raihan, professor of economics department of the University of Dhaka, emphasised on quality spending in the infrastructure sector. He also called for raising the infrastructure spending to 5 percent of GDP from existing 3 percent.
Manmohan Parkash, country director of the Asian Development Bank, pledged support to Bangladesh for infrastructure projects. He also suggested mobilising funds from other sectors.
Hitoshi Hirata, chief representative of the Japan International Cooperation Agency's Bangladesh Office, also assured Dhaka of increased support for the infrastructure sector.
