$2.0b budgetary support likely this fiscal year
The government is working on securing about $2.0 billion budgetary support from bilateral and multilateral development partners in the current fiscal year (FY), finance ministry officials said. In the just-concluded fiscal year, Bangladesh got $1.0 billion as budgetary support to help the economy tide over the crisis created by the covid pandemic. The country, in the meanwhile, received $732 million from the International Monetary Fund or IMF as emergency assistance to meet the balance of payments and budget needs. In the current fiscal, according to the official, the World Bank may provide some $500 million, the Asian Development Bank $500 million, the Japan International Cooperation Agency $300 million and Asian Infrastructure Investment Bank, or AIIB $300 million. At the same time the government is expecting $90 million from the European Union, $50 million from South Korean Economic Development Cooperation Fund, $50 million from French Development Agency, and $30 million from Germany, according to officials. In the last fiscal year, the Asian Development Bank gave $500 million, the World Bank $250 million, and the AIIB, $250 million as budgetary support. Executive director of the Policy Research Institute Dr Ahsan H Mansur told the FE on Monday the budgetary support is very essential now to finance the gap, which is estimated at nearly Tk 900 billion.
Two subsidiaries of Summit Power win international awards
Project financing of two subsidiaries of Summit Power International (“SPI”) have received ‘Oil and Gas Deal of the Year’ and ‘Power Deal of the Year’ awards in the Best Deals in South Asia category at the Asset Triple A Asia Infrastructure Awards 2020. With best deals on projects financing Summit is able to generate power and supply LNG to Bangladesh at a globally competitive rate, said a statement. Summit’s deal worth US$97 million debt financing of Summit LNG Terminal Co Ltd (“SLNG”) received the ‘Oil and Gas Deal of the Year’. Japan’s Sumitomo Mitsui Banking Corporation (“SMBC”) was the mandated lead arranger. It is the first LNG transaction in Bangladesh that was funded on a non-recourse basis solely by an international commercial bank. This was a big step towards the commercial bankability of private sector infrastructure projects in Bangladesh. In addition, Summit Meghnaghat II Power Ltd (583MW), currently in its construction phase, won the ‘Power Deal of the Year’ for securing a US$350 million dual-tranche term loan facility. Summit Group and GE Capital were sponsors of the deal while Standard Chartered Bank (“SCB”) and the International Finance Corporation (“IFC”) were the co-lenders. Swiss SERV was the Export Credit Agency (ECA) structuring and coordinator bank making this deal. It is the first and largest project financing deal backed by the Swiss ECA in Bangladesh in the Independent Power Producer (IPP) space. GE Gas Power is providing the turnkey solution for the power project, and is responsible for the design of the facility, supply and installation of the equipment and commissioning works. The combined-cycle power plant will be powered by GE’s record-setting and most efficient heavy-duty 9HA gas turbine, that will generate equivalent electricity needed to supply up to 700,000 homes in Bangladesh.
DSE snaps five-day winning streak
Dhaka stocks slipped into the red on Monday, snapping a five-day winning streak, as risk-averse investors opted for quick-profit on selective issues amid ongoing virus fears. Following the previous five days’ upward trend, stocks opened on upbeat momentum and the key index of the prime bourse crossed the 4,100-mark in early session. But late hours profit booking sell pressure wiped out the early gains. At the end of the session, DSEX, the key index of the Dhaka Stock Exchange, went down by 9.90 points or 0.24 per cent to settle at 4,089, after adding 118 points in the past five consecutive sessions. However, the Chittagong Stock Exchange edged up with its All Shares Price Index (CASPI)-advancing 5.84 points to close at 11,606 and the Selective Categories Index – CSCX -gaining 4.18 points to finish at 7,033. Of the issues traded, 43 gained, 66 declined and 92 remained unchanged on the CSE. The port city bourse traded 6.86 million shares and mutual fund units with turnover value of Tk 132 million.
Digital financial inclusion could help economic recovery
Bangladesh has embraced a wide range of financial inclusion since 2010 by allowing a vast population to open an account with an initial deposit of Tk 10 to Tk 100 as the government looked to bring the unbanked under the umbrella of the banking sector. As of March 31, banks opened 2.13 crore accounts for those who receive allowances under social safety net schemes, farmers and extremely poor. But now a question has arisen: how much a role is the financial inclusion playing in tackling the ongoing economic maelstrom brought on by the global coronavirus pandemic? The International Monetary Fund has recently said that the countries whose financial inclusion agenda is strong and vibrant could absorb the shocks smoothly. This is good news for Bangladesh given the gigantic number of accounts under the financial inclusion, which is 20 per cent of total accounts of 10.66 crore in the banking sector. But the IMF research paper — The Promise of Fintech: Financial Inclusion in the Post-COVID-19 Era — has also given a message that the traditional inclusion will be unable to address the crisis. There will have a requirement of digital financial inclusion to address the pandemic-stricken economy. Such financial system also helps people maintain social distancing to avoid the deadly pathogen. Although the Bangladesh Bank does not have available data on how many of the 2.13 crore accounts opened under the drive are active, there has been a strong indication that the majority of them are inoperable given the amount of deposit trend with the accounts. The outstanding deposit in the accounts stood at Tk 2,385 crore as of March. The government has provided funds to the garment sector under a stimulus package and the wages to the workers have been paid through MFS channel. It should widen the digital financial inclusion for implementation of the total stimulus packages worth more than Tk 103,000 crore.
A. Rouf Chowdhury re-elected chairman of Bank Asia
A. Rouf Chowdhury has been re-elected as chairman of Bank Asia at the 432nd meeting of the board of directors of the bank held recently. He is the main sponsor of Bank Asia. Mr. Chowdhury is an eminent businessperson and industrialist of the country. He is the Chairman of Rangs Group and Sea Resources Group. He is also a Director of the Daily Star, the highest circulated English daily in the country. He has established organisations in transport, medicine, real estate, IT, banking, deep sea fishing and in other economic sectors of the country that are contributing immensely for country’s employment generation and economic development.