State-owned Investment Corporation of Bangladesh has proposed Citi group Global Markets as its partner for raising $500 million from the international market by issuance of bond.
ICB managing director Abul Hossain say that the proposal was submitted to the Power Division last month as the fund would be used for implementing power projects to citi group.
He said they selected Citigroup finding its proposal more reasonable than two other international banks — Standard Chartered Band and HSBC.
Abul Hossain said they were waiting for approval from the Power Division to their proposal to start next course of action.Official said the ICB had been working on the issue since prime minister’s power and energy adviser Tawfiq-E-Elahi Chowdhury at a seminar in 2016 announced that $500 million would be raised for the PDB from Singapore capital market to finance projects for the state-run electricity generation and distribution company.
The PM’s adviser said the government would require more than Tk 1.6 lakh crore in the long run to implement its projects and those funds could not be mobilised from a single source.
‘So the government has decided to go for raising funds from foreign capital market to implement projects under Bangladesh Power Development Board,” Tawfiq-E-Elahi said.
State minister for power and energy Nasrul Hamid said the government would require $30 billion to implement power sector projects till 2040.On November 14, Nasrul chaired an inter-ministerial meeting on issuance of bond, where representatives of the ICB appraised the updates in this regard.
Officials attending the meeting said decisions were taken to appoint the ICB and the Citigroup as joint lead manager by the PDB and a high-powered committee to coordinate the bond issuance activities.Decision was also taken for asking sovereign guarantee from the finance ministry since the issuance of bond is linked with foreign currency.
This has been the first attempt by the government to raise fund from the international market through issuance of bond.
On November 11, the International Finance Cooperation floated the ‘Bangla Bond’ on the London Stock Exchange to raise Tk 80 crore, equivalent to approximately $9.5 million.The fund would be used for providing loan to the private companies by the ICB.The interest rate of the bond, according to media report, is 6.3 per cent annually.
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Information collect from City bank Ltd