Bangladesh Bank

Investment Promotion & Financing Facility II (IPFF II) Project Cell   

Name & Designation Email Telephone Fax
Dr. Abul Kalam Azad, Ph.D.Executive Director880-2-9530537880-2-9530442
Rathin Kumar PaulIn-Charge880-2-9530230--

Investment Promotion and Financing Facility II (IPFF II) Project has been taken up by Government of Bangladesh (with financial support of the World Bank) with a view to creating sustainable platform for long-term financing in infrastructure and strengthening skills and abilities of the private sector to fill the substantial infrastructure gap in Bangladesh. The IPFF II Project Cell of Bangladesh Bank (BB) acts as the Project Implementation Unit (PIU) for IPFF II. The estimated cost of IPFF II Project is USD 416.70 million and project tenure is 5 years, i.e. from July 2017 to June 2022.

Project Components
IPFF II Project has two broad components:

  1. Long Term Infrastructure Financing Component (US $403.7 million): This component provides long term funds to Participating Financial Institutions (PFIs) for on-lending to infrastructure projects undertaken by private sector investors.
  2. Technical Assistance (TA) Component (US $13 million): This component supports hiring consultants, capacity building for key stakeholders (government agencies, PFIs, project sponsors, E&S consulting firms) and project implementation unit (IPFF II Project Cell). BIFFL and the PPP Authority are among the project beneficiaries, receiving substantial TA support.

Eligible Sectors of IPFF II Financing
IPFF II financing can be extended to the following government approved/endorsed private sectors’ infrastructure sub-projects:

  • Power generation, transmission, distribution, renewable energy and services;
  • Port development (sea, river and land) including inland container terminals, inland container depots and other services;
  • Environmental, industrial and solid waste management projects;
  • Highways and expressways including mass-transit, bridges, tunnels, flyovers, interchanges, city roads, bus terminals, commercial car parkings etc;
  • Airports, terminals and related aviation facilities;
  • Water supply and distribution, sewerage and drainage;
  • Industrial estates, economic zones, eco parks, theme parks and parks development;
  • Social sector including infrastructure in health and education;
  • Information and communication technology (ICT, including wi-max, internet backbone and elearning facilities).

Financing Mix and Tenure of Facility Loan

  • Typically the sponsor shall have 25 percent or more of the total sub-project cost as equity.
  • IPFF II Project will finance no more than 50 percent of the total project cost of a sub-project.
  • Financing to a single infrastructure sub-project shall not exceed 20 percent of the total IDA allocation under long-term infrastructure financing.
  • The maximum term of facility is 20 (Twenty) years with maximum 3 (Three) years grace period.

Interest Rate of Facility Loan
IPFF II financing to PFIs can be provided in US Dollar (USD) or in Bangladeshi Taka (BDT), or in a combination of both currency (depending on request by the PFIs and business need of the sub-projects), at fixed or variable rates stated below:


Currency

Fixed

Variable

USD

USD 10-year swap rate + 50 basis point (bp)

USD 12-month LIBOR
(Potentially also USD 6-month LIBOR+ 30 bp and USD 3-month LIBOR + 60 bp)

BDT

GOB T-bill 364-day yield + 100 bp Or
Prevailing Weighted Average Rate of Interest on Deposits (WARID) + 100 bp  
whichever is lower

GOB T-bill 364-day yield Or
Prevailing Weighted Average Rate of Interest on Deposits (WARID)
whichever is lower

Enlistment of PFIs

  • Private sector scheduled commercial banks (including foreign bank licensed in Bangladesh) and financial institutions operating in Bangladesh can apply for being enlistment as PFIs.
  • IPFF II Project cell selects PFIs subject to their compliance with the eligibility criteria as mentioned in the Operations Manual (OM). At present there are 17 Banks and NBFIs which are enlisted as Participating Financial Institution (PFI) under IPFF II Project:

Banks
1. Bank Asia Limited
2. BRAC Bank Limited
3. Dhaka Bank Limited
4. Dutch-Bangla Bank Limited
5. Eastern Bank Limited
6. Midland Bank Limited
7. Mutual Trust Bank Limited
8. One Bank Limited
9. Prime Bank Limited
10. The City Bank Limited
11. Trust Bank Limited
12. United Commercial Bank Limited

Non Bank Financial Institutions (NBFIs)
1. Bangladesh Infrastructure Finance Fund Limited (BIFFL)
2. IDLC Finance Limited
3. Industrial & Infrastructure Development Finance Company (IIDFC) Limited
4. Infrastructure Development Company Limited (IDCOL)
5. IPDC Finance Limited