The International Finance Corporation (IFC) is investing US$30 million in Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL), both part of the PRAN Group, a leading player of the food and beverage industry (F&B) in the country to support severely impacted businesses- especially those relying on imports for raw materials.
The aim is to improve the resilience of the food processing market while creating jobs, fostering gender diversity and strengthening the economy.
This is the first loans of IFC’s USD term to be used for working capital purposes in Bangladesh, which will enable PDL and HAL to sustain operations, increasing exports and preserving over 30,000 jobs, said a press release here today.
The IFC will further support PRAN Group to improve participation of women as well as inclusion in their workplace through relevant policies and practices. The F&B sector is a key pillar of Bangladesh’s economy.
The food processing industry accounts for approximately 13 percent of the manufacturing production value and employs 19 percent of the industrial manufacturing workforce with a projected compound annual growth rate of 12 percent.
However, the current paucity of foreign exchange, higher energy prices, and power shortages in the country have disrupted the import of raw materials while constraining local commercial banks’ lending ability.
Against this backdrop, IFC’s longer-term US dollar financing will help improve access to foreign exchange, supporting Bangladeshi companies to navigate the crisis.
Uzma Chowdhury, director (Finance) of PRAN-RFL Group said, “As a net importer, regular access to US dollars is critical. But given the prevailing shortage, it has been difficult for us to access USD funds for working capital in a timely manner. By providing scarcely available US dollar working capital, IFC will help ensure the long-term stability of the company’s operations and allow us to contribute to the country’s economic stability.”
As part of its advisory services, IFC will also support PRAN Group to develop the company’s smallholder sourcing supply chain in Bangladesh and identify opportunities to decarbonize its agro-processing operations, among others.
Martin Holtmann, IFC country manager for Bangladesh, Bhutan and Nepal said, “Reiterating our commitment to supporting clients during a crisis, IFC’s financing aims to ease the current lack of access to foreign exchange while enabling private sector growth in Bangladesh.”
“We are optimistic it will help improve food security while prioritizing support for strategically important industries through innovative solutions. By backing PRAN Group, IFC will also contribute to diversifying Bangladesh’s export base, key to creating jobs, expanding market opportunities, and enhancing economic resilience,” Holtmann added.
Since 2010, IFC has invested over US$3.8 billion to help the private sector grow in Bangladesh.