In response to Bangladesh’s foreign exchange shortage impacting businesses reliant on imports, IFC is injecting $30 million into Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL), both subsidiaries of the PRAN Group, a major player in the country’s food and beverage industry (F&B).
This investment aims to fortify the food processing market’s resilience, spur job creation, promote gender diversity, and bolster the economy.
Marking IFC’s inaugural USD term loans for working capital in Bangladesh, the funding will enable PDL and HAL to sustain operations, boost exports, and safeguard over 30,000 jobs. IFC will also collaborate with PRAN Group to enhance women’s participation and inclusivity in the workplace through pertinent policies and practices.
The F&B sector stands as a vital component of Bangladesh’s economy, contributing around 13% of manufacturing production value and employing 19% of the industrial manufacturing workforce, with a projected annual growth rate of 12%.
However, the prevailing foreign exchange scarcity, coupled with elevated energy costs and power deficits, has disrupted raw material imports and strained local banks’ lending capacities. In response, IFC’s longer-term USD financing aims to alleviate foreign exchange constraints, aiding Bangladeshi firms in navigating the crisis.
Uzma Chowdhury, Director of Finance at PRAN-RFL Group, emphasized the significance of regular access to US dollars for net importers. She highlighted IFC’s role in providing scarce USD working capital, ensuring sustained operations and contributing to economic stability.
As part of its advisory services, IFC will assist PRAN Group in developing smallholder sourcing supply chains and exploring avenues for decarbonizing agro-processing operations.
Martin Holtmann, IFC’s Country Manager for Bangladesh, Bhutan, and Nepal, reiterated IFC’s commitment to supporting clients during crises. He expressed optimism that IFC’s financing would alleviate foreign exchange constraints and foster private sector growth in Bangladesh, ultimately enhancing food security and promoting strategic industry support.
IFC’s investment underscores its ongoing commitment to fostering private sector growth in Bangladesh, with over $3.8 billion invested since 2010.
