Bangladesh - Strategy

Improving the investment climate is one of the two pillars of assistance detailed in the World Bank Group Country Assistance Strategy for Bangladesh (approved by the Board in February 2006). As part of this strategy, IFC will continue to provide direct support to the private sector in Bangladesh, with a special emphasis on: (i) private infrastructure; (ii) energy, including investments in gas production and related infrastructure; (iii) manufacturing and service sector companies; and (iv) innovative private sector sponsored projects in health and education. IFC will also support the development of local capital markets and a competitive banking sector through direct investments and institution building. Furthermore, to promote SME development, IFC’s regional SME Facility, the SouthAsia Enterprise Development Facility (SEDF), will continue to provide technical assistance to financial intermediaries, SMEs and the professional service firms that support these SMEs. A separate facility, the Bangladesh Investment Climate Facility (BICF), launched in 2007, will assist the Government of Bangladesh to reforms its Investment Climate.

However, our ability to execute this strategy has been constrained by slow progress on policy and regulatory reform, delays in receiving regulatory approvals for investments, and lack of transparency in infrastructure concessioning.

In addition, domestic investment opportunities have been limited due to the lack of strong local sponsors. In view of this scarcity of domestic private investors, a majority of our projects involve foreign sponsors and co-investments by other bilaterals and multilaterals, viz AKFED, ADB, CDC, DEG, FMO.