Bangladesh stands at a critical juncture in its developmental journey, with infrastructure development being a cornerstone of its economic growth agenda.

Over the past decade, Bangladesh has undertaken and implemented several infrastructural development projects in sectors such as transportation, energy, power, telecommunications, and urban development -- all of which are believed to be crucial for the long-term growth of the economy.

The government's renewed commitment to infrastructure development underlines a strategic shift aimed at addressing historical shortcomings and unlocking the nation's growth potential. With a clear focus on combating corruption and fostering an environment conducive to investment, Bangladesh seeks to become a major power economically.

However, the current global crisis underscores the urgency of getting the infrastructure strategy right. Against this backdrop, stakeholders must prioritise key components such as ensuring adequate power supply, enhancing transportation networks, and optimising port efficiency.

Central to the success of infrastructure development is access to financing, which requires concerted efforts from both public and private sectors, as well as international development partners. Embracing public-private partnerships and creating favourable economic incentives are essential to attracting necessary investments.

In structuring financing arrangements, several factors come into play, including project size, off-taker reliability, and transmission capacity. Bangladesh's progress in addressing distribution challenges bodes well for attracting investors, while strong sponsorships and transparent contract frameworks mitigate risk perceptions.

Capacity payments and the importance of the payback period are critical considerations in financing large projects. Capacity payments ensure revenue certainty for investors, while a favourable payback period enhances project feasibility and attractiveness to financiers. Long-term financing mechanisms, including debt instruments and equity investments, play a crucial role in sustaining infrastructure projects over their lifecycle.

The involvement of multilateral and bilateral development agencies, alongside private equity firms and other financing institutions, emphasises the diverse financing landscape available to support infrastructure projects in Bangladesh. Leveraging these resources effectively can catalyse progress and alleviate reliance on traditional donor funding.

The banking sector will also have to be more open towards the idea of financing large projects. For this to happen, understanding the mechanisms of project financing is crucial. Bankers have to be trained well so that they can conduct proper due diligence and thoroughly assess the risks associated with such projects.

Furthermore, tapping into local capital markets presents an opportunity to mobilise domestic liquidity for infrastructure initiatives, supplementing external financing sources. Strengthening governance structures and enhancing capacity within the civil bureaucracy are critical enablers for successful project implementation and investor confidence.

As Bangladesh navigates its infrastructure development journey, transparency, execution support, and corporate governance emerge as essentials. By fostering a conducive environment for infrastructure investment, Bangladesh can lay the foundation for sustained economic growth and prosperity.

The country has experienced significant economic growth, consistently exceeding a 7 percent annual growth rate in recent years despite challenges like the Covid-19 pandemic and the Russia-Ukraine war. The country is set to become the 26th largest economy by 2030 and the economy is predicted to cross the $1-trillion mark by 2040 even with a CAGR of 5 percent. To sustain this growth and achieve forecasted results, increased investment in various infrastructure sectors is vital.

Realising Bangladesh's infrastructure potential requires a coordinated effort from all stakeholders, guided by a clear vision and unwavering commitment to overcoming existing challenges. Through strategic partnerships, innovative financing mechanisms, and effective governance, Bangladesh can emerge as a regional powerhouse, driving inclusive growth and development for its citizens.

The author is an economic analyst and has dedicated this write-up to Dr Fauzul Kabir Khan, who helped popularise and structure long-term financing for major infrastructure projects in Bangladesh