The International Finance Corporation (IFC) is injecting $30 million into Pran Dairy Limited and Habiganj Agro Limited, both integral parts of the PRAN Group, a prominent conglomerate within Bangladesh’s food and beverage sector.

Amidst the prevailing shortage of foreign reserves, IFC’s decision to extend a loan to the PRAN Group is aimed at bolstering severely impacted businesses, particularly those heavily reliant on imported raw materials, as per a press release issued on Monday.

The investment’s objectives, as stated in the release, include enhancing the resilience of the food processing market, job creation, fostering gender diversity, and fortifying the economy.

This marks IFC’s first USD term loan allocated for working capital purposes in Bangladesh, which will enable PDL and HAL to sustain their operations, escalate exports, and safeguard over 30,000 jobs.

Additionally, IFC pledges to support the PRAN Group in enhancing female participation and inclusivity within their workforce through the implementation of pertinent policies and practices.

The food processing industry presently contributes approximately 13 per cent to the manufacturing production value in Bangladesh and employs 19 per cent of the industrial manufacturing workforce, with a projected compound annual growth rate of 12 per cent.

IFC acknowledges that the current scarcity of foreign exchange, escalating energy costs, and power shortages have disrupted the importation of raw materials, thereby constraining the lending capacity of local commercial banks.

In response to these challenges, IFC’s provision of longer-term US dollar financing aims to enhance access to foreign exchange, thereby assisting Bangladeshi enterprises in navigating through the crisis.

Director of PRAN-RFL Group, Uzma Chowdhury, emphasized the critical nature of regular access to US dollars for net importers. Given the prevailing shortage, accessing USD funds for working capital has proven to be challenging. She expressed gratitude towards IFC’s provision of scarce US dollar working capital, highlighting its role in ensuring the company’s operational stability and its contribution to the economic stability of the country.

Furthermore, as part of its advisory services, IFC will assist the PRAN Group in enhancing its smallholder sourcing supply chain within Bangladesh and identifying opportunities for decarbonizing 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 emphasized that the financing provided by IFC aims to alleviate the current lack of access to foreign exchange while fostering private sector growth in Bangladesh.

Since 2010, IFC has invested over $3.8 billion to facilitate private sector growth in Bangladesh.