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Bangladesh Project Finance Update: Some New Developments and Practices on the Local Aspects of Cross-border Financing in Bangladesh
October 16, 2021The “economic miracle of Bangladesh” has in part been fueled by a robust interest by Development Financial Institutions and International Financial Institutions. The Government has been driving an energy and infrastructure push, and has also put great effort on developing industrial zones. Reason enough to take another, updated look at project finance in Bangladesh.
Highlights of this note
- Introduction
- Government approval for foreign loans: Currently, most applications are approved, but there are delays
- New process for updating the borrower credit database
- Holding and obtaining foreign currency
- Contractual documentation
- Security: enforcement of a share pledge now requires cooperation by the pledgor
- How much debt is allowed and at which interest rate?
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- July 4, 2023 - Circular No. 06 dated 2 March 2023 issued by the Banking Regulation and Policy Department of the Bangladesh Bank on “Exemption from the General Credit Limit under Section 26B(1) of the Bank Company Act 1991 for Electricity Producing Companies”
- March 31, 2023 - Bill No. 06 dated 22 January 2023 issued by Bangladesh Energy Regulatory Commission (“BERC”) on “Amendment of the Bangladesh Energy Regulatory Commission Act 2003”
- January 25, 2023 - Parliament re-enacted the law named Bangladesh Oil, Gas and Mineral Corporation Ordinance, 1985 to Bangladesh Oil, Gas and Mineral Corporation Act 2022, dated 20 November 2022.
- November 23, 2022 - Parliamentary Amendment on Bangladesh Atomic Energy Commission 2017, dated 20 November 2022.
- November 21, 2022