IFC provides $30m in loans to PRAN Group amid dollar shortage

The International Finance Corporation (IFC), a member of the World Bank Group, is providing $30 million in Pran Dairy Ltd (PDL) and Habiganj Agro Ltd (HAL), concerns of PRAN Group, to support their businesses severely impacted by the shortage of US dollars in Bangladesh. 

It marks the first of IFC's US dollar term loans to be used for working capital purposes in Bangladesh, enabling PDL and HAL to sustain operations, increase exports, and preserve over 30,000 jobs, said the IFC in a statement today.

IFC said the food and beverage sector, a key pillar of Bangladesh's economy accounts for around 13 percent of the manufacturing production in value. The sector employs 19 percent of the manufacturing workforce with a projected compound annual growth rate of 12 percent.

"However, the current scarcity of foreign exchange, higher energy prices, and power shortages in the country have disrupted the import of raw materials and constrained 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, it said.

"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," said Uzma Chowdhury, director of finance of PRAN-RFL Group.

IFC said as part of its advisory services, it 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.

IFC country manager for Bangladesh, Bhutan, and Nepal Martin Holtmann said IFC's financing aims to ease the current lack of access to foreign exchange while enabling private sector growth in Bangladesh. 

"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."

Since 2010, IFC has invested over $3.8 billion to help the private sector grow in Bangladesh.