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 in the food and beverage industry (F&B) in Bangladesh. This investment aims to support severely impacted businesses, particularly those reliant on imports for raw materials. The goal is to enhance the resilience of the food processing market, create jobs, foster gender diversity, and strengthen the economy.
This marks the first time IFC’s USD term loans will be utilized for working capital purposes in Bangladesh. These funds will enable PDL and HAL to sustain their operations, increase exports, and preserve over 30,000 jobs, as stated in a press release today. Additionally, IFC will assist PRAN Group in enhancing women’s participation and inclusion in the workplace through relevant policies and practices. The F&B sector plays a crucial role in Bangladesh’s economy, accounting for about 13 percent of manufacturing production value and employing 19 percent of the industrial manufacturing workforce, with a projected compound annual growth rate of 12 percent.
However, challenges such as foreign exchange shortages, high energy prices, and power shortages have disrupted the import of raw materials and constrained local commercial banks’ lending capacity. In response, IFC’s longer-term US dollar financing aims to improve access to foreign exchange, helping Bangladeshi companies navigate the crisis.
Uzma Chowdhury, director (Finance) of PRAN-RFL Group, emphasized the importance of regular access to US dollars for a net importer like PRAN Group. Given the current shortage, accessing USD funds for working capital has been challenging. IFC’s provision of scarcely available US dollar working capital will ensure the long-term stability of the company’s operations and contribute to the country’s economic stability.
As part of its advisory services, IFC will also support PRAN Group in developing the company’s smallholder sourcing supply chain in Bangladesh and identifying opportunities to decarbonize its agro-processing operations, among other initiatives.
Martin Holtmann, IFC country manager for Bangladesh, Bhutan, and Nepal, reiterated IFC’s commitment to supporting clients during crises. He stated that IFC’s financing aims to alleviate the lack of access to foreign exchange while promoting private sector growth in Bangladesh. This investment is expected to enhance food security, prioritize support for strategically important industries, diversify Bangladesh’s export base, create jobs, expand market opportunities, and enhance economic resilience.
Since 2010, IFC has invested over US$3.8 billion to help the private sector grow in Bangladesh.
