Eight banks and financial institutions of Bangladesh and the World Bank are going to provide a syndicated credit facility of around Tk 430 crore for the development and expansion of Bay Economic Zone Limited (BEZL).

The local lenders will provide Tk 362.6 crore of the fund while the remaining Tk 67.20 crore, or $6 million, will come from participating financial institutions (PFIs) of the Investment Promotion and Financing Facility II (IPFF-II) of the WB.

The IPFF-II is being funded by the Washington-based lender under a 15-year credit line between the International Development Association and the finance ministry, with the Bangladesh Bank in charge of implementation.

Prime Bank PLC is the lead arranger, PFI and adviser of the credit facility.

As such, Prime Bank will assist clients in each step of this milestone transaction, including deal structuring, applying for loans, ensuring due diligence, fund arrangement, and documentation, according to Shams Abdullah Muhaimin, deputy managing director of the private commercial bank.

He said Prime Bank's dedicated debt capital market team had provided end-to-end support and solutions to ensure that the deal for the credit facility is a successful one.

Prime Bank has long partnered with businesses that make significant contributions to the nation's sustainability and infrastructure. Now, it is supporting BEZL.

"This project is no exception as we remain committed to our vision of building the nation through meaningful and sustainable partnerships," he added.

Muhaimin said there are several reasons for Prime Bank's selection as lead arranger and financier of the project, which is expected to bring in foreign direct investment (FDI) and create opportunities for expanding exports and industrialisation.

"We have not only been able to secure a significantly long-term fixed-rate credit facility for the project, but also we have been able to bring down the financing cost considerably."

With the vision to mark significant contributions towards the socio-economic growth of Bangladesh, Bay Group, an export-oriented conglomerate, has established the economic zone in Gazipur.

The Bangladesh Economic Zones Authority (Beza) granted the final approval to set up the facility on 37 acres of land in 2017.

The economic zone is divided into 22 plots. Of them, 11 plots are dedicated for industrial use while the rest are used for residential, healthcare, and utility facilities.

The zone will provide utility and amenity support to investor companies and ensure the health and safety of their workers.

BEZL has signed agreements with four investors and two foreign-owned factories that are now fully operational inside the economic zone.

Under the new credit facility, another 11 industrial plots will be set up for factories.

The company expects to complete all civil construction and facility setup by 2024.

While Bay aims to bring in foreign investors and FDI through the project, any environmentally compliant manufacturing facility can be set up in the economic zone.

The inflow of FDI and exports from the economic zone will not only make the project more sustainable, it will alleviate the pressure on the country's foreign reserve as well.

BEZL has already created jobs for 2,329 people, 57 percent of which are women.

Upon successful development of the project, there will be the possibility of generating more than 22,250 jobs in the BEZL sub-project area, Muhaimin said.

Besides, as per the masterplan, there will be provisions for staff dormitories, emergency medical care units, and childcare facilities.

Suhail Kassim, team leader of the IPFF-II, said the World Bank is supporting the Bangladesh Bank through the initiative to build local financial institutions' capacity to provide long-term financing to private companies for infrastructure sub-projects.

The IPFF-II provides partial financing to selected sub-projects through PFIs.

The IPFF-II has lent $39.76 million through a mix of World Bank financing and government support to the BEZL development sub-project, he added.