Bangladesh Infrastructure Finance Fund Limited (BIFFL) is a newly established public limited company which envisages to attract private investments from local and foreign investors and to invest in companies that are implementing infrastructure projects in Bangladesh. The Government of the People’s Republic of Bangladesh has already provided BDT 16 Billion (USD 220 mill) to this company as initial equity capital and has taken 100% ownership of the company. But it is expected that the company will go for equity offering to the local and foreign private investors and in this process will arrive at a unique ownership mix between Government and private investors. Currently, the Board of Directors of the company is drawn from the public sector. BIFFL
The Bangladesh Infrastructure Finance Fund Limited, or BIFFL, was incorporated by the Ministry of Finance in 2011 to provide long-term financing in local currency to infrastructure projects that meet BIFFL’s investment criteria. BIFFL seeks to attract investment from both institutional and retail investors (including non-resident Bangladeshis and overseas foreign workers) to provide an alternative savings/investment vehicle in the Bangladesh market. BIFFL is managed independently following objective investment criteria. Thursday, August 25, 2011
Govt sets up company for infrastructure fund
The government has established the largest ever finance company with a Tk 1,600 crore ($217 million) paid-up capital to fund infrastructure projects. Authorised capital of the company titled Bangladesh Infrastructure Finance Fund Ltd (BIFFL) is Tk 10,000 crore ($1.5 billion), which is also the highest in Bangladesh. Grameenphone is the second biggest company with a Tk 1,350.30 crore paid-up capital followed by Islami Bank with Tk 1,000 crore. “We have applied to the Bangladesh Bank to issue the BIFFL a licence as a non-bank financial institution,” said Mohammad Muslim Chowdhury, director and acting chief executive officer of the newly formed company. “It will take around six months to start operation of the company,” said Chowdhury, also a joint secretary of the finance division. The BIFFL was registered as a public limited company with the Registrar of Joint Stock Companies and Firms. The company has already been allocated money and office (former tax ombudsman’s office) and recruitment for different posts is under process.
The new company would be the second non-bank financial institution owned fully by the government after Infrastructure Development Company Ltd. There are 28 other non-banks under the private sector. Although the government initiated public-private partnership in its budget for fiscal 2009-10 to develop the country’s infrastructure and allocated Tk 3,000 crore in that budget, it failed to initiate any funding under the PPP. According to officials, the BIFFL has been paid Tk 1,600 crore from the PPP fund so that the idea could see some results. “I believe the BIFFL will bring in new dimensions in financing PPP projects and help achieve the vision of the government,” said the application written by Chowdhury to the BB for a licence. However, some government officials who are closely involved with the formation of the BIFFL are unsure of how such a big fund should be managed by a new company. But an official of the finance ministry, which will govern the BIFFL, has dispelled such confusions, saying, “We are thinking about outsourcing a fund manager to help the new company work.”
Promotion of National Development by leveraging relative strengthening of Public and Private Sector through financing PPP Infrastructure Projects.
BIFFL’s Mission is:
To perform as a highly dedicated Financial Institution of Bangladesh in a professional manner by adopting best international standards maintaining high standard of integrity and ethics at all levels of management;
To promote Country’s economic development by facilitating and encouraging Private Sector Investment in all infrastructural projects;
To support sustainable economic growth of Bangladesh through facilitating Infrastructure Development;
The importance of infrastructure for sustained economic development and improving the living standards of the population is well recognized. Millions of people across the country still lack access to roads, transport, electricity, safe drinking water, proper sanitation, portable water and easy communication network, etc. The country, at the same time, has been failing to realize its full growth
The main goal of BIFFL is:
To provide long-term finance to critical infrastructure projects in Bangladesh, with a focus on promoting the evolving PPP program;
To catalyze co-financing from private financial sources through the comfort of a professional domestic fund entity’s presence in an investment;
To provide a unique vehicle for capital markets development, by providing a number of avenues to capture domestic and foreign investment within the contexts of a robustly designed and well-governed investment vehicle.
To overcome current limitations on financial markets oversight and governance by creating a self-sustaining ‘regulation-by-contract’ structure.
The main objective of BIFFL is:
To provide predominantly long-term financing for PPP projects through issuance of bonds and debt instruments and equity offerings. BIFFL envisages attracting private investments from local & foreign investors and to invest companies that are implementing infrastructure projects in Bangladesh.
The Primary Objectives of BIFFL are:
To receive and accept from GoB and/or any other foreign or local source including official or semi-official development sources –
Funds and moneys by way of loans, debts, debt backed by sovereign guarantees;
Bond specially designed for non-resident Bangladeshis, sub-sovereign debt, equity, preference shares or any other quasy-equity instruments, development of Limited Partner (LP) –
For the development of infrastructure projects in Bangladesh.
To promote, encourage and finance private sector investment in all critical infrastructure sectors.
To create funds, sub-funds including Islamic funds and any other type of funds as deemed appropriate by the Company; engage Fund Managers, Investment Advisors, Management Consultants or any such other advisors or staff to manage the business of the Company.