Today, FMO announces that together with Infrastructure Development Company Limited (“IDCOL”) it has signed an agreement with Summit Alliance Port Limited (“SAPL”) in Bangladesh, providing a USD 30.51 million senior corporate loan. IDCOL and FMO will provide USD 10 million and USD 20.51 million, respectively.
By providing the loan facility from the Infrastructure Development Fund, FMO contributes to the improvement of basic infrastructure in Bangladesh, a country in the process of graduating as ‘lower middle income country’ in Asia. The funds will be used to expand SAPL’s current business by developing container transport by river as a cost competitive, efficient, innovative and more environmentally friendly (Transport Modal Shift) alternative for transport by truck. Due to the substantial reduction/avoidance in GHG emissions, the transaction can be labelled as 100% green.
Since the start of commercial operations in 2007, SAPL has become the leading Bangladeshi company providing off-dock services, such as: i) Inland Container Depot (“ICD”) services, and ii) Container Freight Station services. ICD services comprise of transportation and storage of empty containers (“Empties”) as well as redelivery of the Empties to various locations as per client’s advice. SAPL’s container yard and warehouses are located close to the Port of Chittagong, which is the country’s principal sea port.
Cargo hinterland from Dhaka and surrounding area is estimated to generate about 70% of total cargo throughput in Bangladesh. Chittagong is located 265km away from Dhaka, mainly accessible via national road 1 (Dhaka–Chittagong Highway). Road transport is being hampered by heavy congestion and poor road conditions. Despite ongoing upgrading, the situation is only expected to worsen with projected volume growth in the years to come. Infrastructure is the backbone of economic development. Therefore, the project will be highly developmental as it will improve cargo handling capacity in the country, which is much needed to keep up with demand. Furthermore, it will strengthen Bangladesh’s international trade, which plays a significant role in fuelling the country’s economic growth - a crucial factor for poverty alleviation.
FMO’s CIO Linda Broekhuizen said: “FMO is very pleased to support the much needed improvement of the basic infrastructure in Bangladesh, contributing to the economic growth and job creation in the country.”
SAPL’s Director, Fazlul Haque said: “SAPL is very delighted to work with FMO and IDCOL to develop our river terminal project, 1st of its kind in the private sector in Bangladesh with impact on economic growth, ultimately contributing to the national development.”
About FMO
FMO is the Dutch development bank. FMO has invested in the private sector in developing countries and emerging markets for more than 45 years. Our mission is to empower entrepreneurs to build a better world. We invest in sectors where we believe our contributions can have the highest long-term impact: financial institutions, energy and agribusiness. Alongside partners, we invest in the infrastructure, manufacturing and services sectors. With an investment portfolio of EUR 8 billion spanning over 85 countries, FMO is one of the larger bilateral private sector development banks globally. www.fmo.nl
Press contact:
Paul Hartogsveld
Senior Marketing & Communications
T: +31 70 314 9928
M: +31 6 11589127
