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AIIB invests US$200 million in Bangladesh infrastructure
On-lending facility coursed through government-owned financial institution IDCOL
Michael Marray 18 May 2022

The Asian Infrastructure Investment Bank (AIIB) and the government of Bangladesh have signed a US$200 million on-lending facility to Infrastructure Development Company Limited (IDCOL) to finance infrastructure projects in the South Asian country.

The deal marks AIIB’s first investment through a financial institution into infrastructure the country. IDCOL is a government-owned non-banking financial institution established for infrastructure financing in Bangladesh.

According to the multilateral development bank, the large infrastructure deficit in Bangladesh is one of the most critical development challenges facing the country, which were exacerbated by the Covid-19 pandemic. Bangladesh’s Perspective Plan 2041 highlights the need for an annual investment of US$10 billion in infrastructure over the next two decades.

The project will make long-term financing available for infrastructure subprojects in power generation, renewable and low-carbon electricity, information and communications technology infrastructure, cross-regional transportation and others, all of which seek to enhance economic activity and create employment opportunities in the country.

“By providing long-term financing to the private sector in Bangladesh, AIIB will promote infrastructure investment, help alleviate the funding constraints faced by private sponsors, and help mobilize private capital by attracting additional financing,” says Urjit Patel, AIIB vice-president, investment operations (Region 1).

“This project also aligns with AAIB‘s thematic priority to finance green infrastructure. Aside from further strengthening the partnership between AIIB and Bangladesh to promote sustainable infrastructure development, this will also help facilitate the country’s economic and financial recovery amid the pandemic.”

In Bangladesh, AIIB has approved 15 projects totalling over US$2.8 billion, more than half of which are focused on energy, transport and water sectors.

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