IFC invests US$30M in Pran Group to boost Bangladesh’s private sector, job creation

INDIA – The International Finance Corporation (IFC) has announced a substantial investment of US$30 million in Pran Dairy Limited (PDL) and Habiganj Agro Limited (HAL), subsidiaries of PRAN Group, a prominent entity in Bangladesh’s food and beverage sector.

This move is aimed at fortifying Bangladesh’s private sector resilience and fostering job creation in the wake of economic challenges.

According to Uzma Chowdhury, director of Finance at PRAN-RFL Group, the financial assistance, totaling US$15 million each for Pran Dairy and Habiganj Agro, will primarily be allocated to address the pressing issue of importing raw materials, exacerbated by a shortage of US dollars in Bangladesh.

The investment endeavors to enhance the resilience of the food processing market while simultaneously generating employment opportunities and promoting gender diversity, thereby contributing to the overall strengthening of the economy.

The six-year loan, inclusive of a two-year grace period, is intended to facilitate the sustenance of operations, boost exports, and safeguard over 30,000 jobs across Pran Dairy and Habiganj Agro.

Moreover, the collaboration between IFC and the PRAN Group extends beyond financial aid, with a focus on fostering inclusion and enhancing the participation of women in the workplace through tailored policies and practices.

However, challenges such as foreign exchange shortages, elevated energy prices, and power shortages have impeded the import of raw materials and constrained the lending capacity of local commercial banks.

In response to these challenges, IFC’s longer-term US dollar financing endeavors to alleviate the shortage of foreign exchange, thereby aiding Bangladeshi companies in navigating the crisis.

Uzma Chowdhury emphasized the significance of regular access to US dollars for net importers, stating that the scarcity of USD funds for working capital has posed significant challenges.

“Through providing scarce US dollar working capital, IFC aims to ensure the long-term stability of operations and contribute to the economic stability of Bangladesh.”

In addition, as part of its advisory services, IFC will collaborate with the PRAN Group to enhance the company’s smallholder sourcing supply chain and explore opportunities for decarbonizing its agro-processing operations.

Martin Holtmann, IFC country manager for Bangladesh, Bhutan, and Nepal, reiterated the organization’s commitment to supporting clients during crises.

He emphasized that IFC’s financing initiatives seek to address the current shortage of foreign exchange while fostering private sector growth in Bangladesh.

Holtmann expressed optimism that the investment will bolster food security, prioritize support for strategically important industries, and diversify Bangladesh’s export base, ultimately facilitating job creation, expanding market opportunities, and enhancing economic resilience.

IFC’s investment in the PRAN Group reaffirms its dedication to promoting private sector growth in Bangladesh, with over US$3.8 billion invested since 2010.

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