American company wants to invest billions in Bangladesh infrastructure

The USA-based Sovereign Infrastructure Group (SIG) has agreed to explore business opportunities in Bangladesh’s infrastructure projects.

SIG and BD Finance have signed a memorandum of understanding in this regard on Thursday in Washington. The deal has enabled SIG to mobilise US capital market investors into Bangladesh infrastructure projects through BD Finance. The Embassy of Bangladesh in Washington DC hosted the event.

Now BD Finance will act as the American company’s local representative and provide advisory services for SIG’s investments here.

Initially, SIG has agreed to bring $2 billion investments in Bangladesh in maximum two years.

Also, SIG will lend BD Finance $40 million (Tk340 crore) to be used for on-lending to small and medium enterprises (SMEs), green energy projects, women entrepreneurs, social housing, economic empowerment initiatives for transgender and the refinancing of existing BD Finance obligations, said Hamid.

“If we can give SIG big and quality projects, the investment figure could be much higher than $2 billion,” Kyser Hamid, managing director and CEO of BD Finance, told the Business Insider Bangladesh.

BD Finance prefers the private sector over the public sector for financing as it takes less time, he said.

Bangladesh’s economy has been growing impressively for over a decade and it was one of the fastest growing nations before the coronavirus hit the world early last year. The government has been investing its best to develop the country’s poor infrastructure, but long-term financing is a big crisis, as banks here are unable to lend funds for long-term as they run with short-term deposits.

“Here SIG and BD Finance will bridge the gap for long-term financing needs. We’ll lend foreign currency to our banks for long-term,” said Hamid.

Lerry Knox, co-founder and CEO of SIG, said the company was founded to bridge the global infrastructure investment gap by mobilising US institutional investor’s capital into growth markets such as Bangladesh.

“Bangladesh is a top priority for SIG. As a member of the Next 11, Bangladesh is one of the fastest growing economies in the world and is the 8th largest country by population,” Knox commented after the deal.

“Bangladesh is currently on track to invest an impressive $417 billion in infrastructure by 2040. Through our engagement with BD Finance, SIG hopes to play a leading role with our partners to support the country’s tremendous growth,” he said.

The CEO said the memorandum between SIG and BD Finance lays the framework for the collaboration and both sides look forward to many years of contributing to Bangladesh’s economic growth.

Benjamin Levine, vice president of SIG, said: “Today’s event commemorating the memorandum between SIG and BD Finance is the beginning of a worthy endeavour — one that will support Bangladesh’s economic growth for years to come”.

Manwar Hossain, chairman of BD Finance, termed the development as a historic event for the banking and financial sector of Bangladesh as it is the largest foreign investment effort by a financial institution in Bangladesh.

“This is our way of celebrating the Bangladeshi 50th birthday, working hard and excelling in what we are supposed to do,” Hossain said.

“We are committed to making lending very competitive and borrowing very affordable,” Hossain said.

Waeez Hossain, deputy managing director of Anwar Group of Industries, also spoke on the occasion.