In order to finance different development projects from the country’s own fund, Prime Minister Sheikh Hasina inaugurated Bangladesh Infrastructure Development Fund (BIDF) on 15th March (Monday).
Prime Minister Sheikh Hasina joined the inaugural ceremony as chief guest virtually from her official residence Ganabhaban.
Finance Minister AHM Mustfa Kamal, MP, State Minister for Shipping Khalid Mahmud Chowdhury, MP, and Bangladesh Bank Governor Fazle Kabir also spoke at the ceremony.
The BIDF has been established with a view to taking funds from the foreign exchange reserves embarked on its journey through financing to the capital and maintenance dredging in Rabnabad Channel of the Paira Port.
BIDF is the first such venture in South Asia as well as in the world which would finance the development activities.
Meanwhile, the Finance Division, Paira Port Authority and Sonali Bank have already inked a tripartite agreement at the Finance Division, to achieve the goal.
The premier stated as a developing nation now Bangladesh has to move on with its own feet and run develop works with its own financing towards becoming a developed country.
Mentioning that during this Covid-19 situation the country’s foreign currency reserve was increased alongside reduction of other costs, Sheikh Hasina said the government has thought about the potential use of this foreign currency to move out from loan dependency rather make instances of own financing or loan.
Despite the effects of the pandemic, inward remittances surged, but import expenditure dropped. Foreign exchange reserves in Bangladesh reached a new high of $44 billion.
Bangladesh will now park part of the reserves in the infrastructure fund, setting aside money for import expenditures for six months.
She said the government has framed the BIDF keeping the foreign currency reserve to meet the country’s import cost of six months considering frequent natural calamities here and utilize the surplus forex reserve for profitable development works.
“This endeavor will be for an effective investment of surplus foreign currency reserve,” she said, adding “It will not only be beneficial for the country but also help us to grow our own confidence and self-esteem, and we will be able to show the world that we can do it.”
The premier also said investors now could borrow from the BIDF and use it in the country’s development initiatives.
Regarding the financing to the Paira Port, she said a deep sea port could be established in future centering this port. The Prime Minister expressed her gratitude to the authorities concerned to materialize her concept of using the surplus foreign currency reserve.
She raised the topic of taking loans from the forex reserves at a meeting of the Executive Committee of the National Economic Council (ECNEC) last year. Later, Bangladesh Bank and Finance Division took necessary effective measures in this regard.
In the financing of Rabnabad Channel, Bangladesh Bank will issue loan to Sonali Bank and Sonali Bank will disburse it to the Paira Port as loan. Payra Port will get Tk 54.17 billion from the BIDF through Sonali Bank over a period of 10 years.
PM said the fund will be used for investment in ports and power sector initially with an annual investment target of $2 billion, according to a statement from the ministry.
About the country’s development and success, the Prime Minister said love for people and the country is the main magic for the development of Bangladesh.
She aspired it would be possible to improve the navigability of the Rabnabad Channel by increasing its depth to 10.5 metres through capital dredging.
“It will add a new dimension to Bangladesh’s foreign trade as a huge number of foreign ships will arrive at the port,” the prime minister said.
The government assumes the demand for container cargo transportation will double by 2050, according to her.