Key Takeaways
- • Bangladesh is considering a sovereign fund of up to $2 billion, with a potential size of $1 billion to $2 billion, to mobilise international capital for infrastructure, renewable energy and digital projects, according to a finance ministry press release.
- • Finance and Planning Minister Amir Khosru Mahmud Chowdhury presented the proposal to top officials of Korea Investment Corporation (KIC) in Seoul.
- • The discussions also explored combining KIC equity investment with Korea Eximbank (KEXIM) financing, including through Korean fund managers.
- • Bangladesh previously planned a sovereign wealth fund in 2017 using foreign currency reserves, but that plan was scrapped.
- • Separate talks with KEXIM reviewed the $3 billion Economic Development Cooperation Fund (EDCF) Framework Arrangement for 2023-2027, though KEXIM said EDCF priorities are still under review.
Summary
Bangladesh is considering creating a sovereign fund of up to $2 billion to mobilise international capital to finance infrastructure, renewable energy and digital projects, according to a press release from the finance ministry. Finance and Planning Minister Amir Khosru Mahmud Chowdhury shared the plan at a discussion with top officials of Korea Investment Corporation (KIC). The minister is in Seoul leading a Bangladeshi delegation aimed at expanding bilateral economic and financial cooperation.
The proposed Bangladesh Sovereign Fund, with a potential size of $1 billion to $2 billion, was discussed as one possible investment vehicle. The two sides discussed ways to mobilise institutional capital in South Korea and explored combining KIC equity investment with Korea Eximbank (KEXIM) financing, including through Korean fund managers. Dhaka and Seoul agreed to deepen their economic partnership with greater emphasis on investment, advanced technology, artificial intelligence, infrastructure, innovative financing and private-sector cooperation.
The article notes that Bangladesh planned to form a sovereign wealth fund in 2017 using its foreign currency reserves to invest in infrastructure, but that plan was subsequently scrapped. Sovereign wealth funds are generally government-owned vehicles financed through transfers of foreign exchange assets and invested overseas over the long term.
In a separate meeting with KEXIM Chairman and Chief Executive Officer Hwang Kiyeon, the two sides reviewed the $3 billion Economic Development Cooperation Fund (EDCF) Framework Arrangement for 2023-2027. Priority projects discussed included the Dhaka MRT Line-5 Southern Route, the Matlab Uttar-Gazaria Bridge and the procurement of 260 broad-gauge passenger carriages. Bangladesh proposed a clear roadmap for the remaining EDCF resources and highlighted emerging areas such as AI, digital transformation, smart infrastructure and supply chains. KEXIM noted that EDCF priorities are currently under review and that project proposals would be considered in consultation with relevant Korean authorities.
The proposed Bangladesh Sovereign Fund, with a potential size of $1 billion to $2 billion, was discussed as one possible investment vehicle. The two sides discussed ways to mobilise institutional capital in South Korea and explored combining KIC equity investment with Korea Eximbank (KEXIM) financing, including through Korean fund managers. Dhaka and Seoul agreed to deepen their economic partnership with greater emphasis on investment, advanced technology, artificial intelligence, infrastructure, innovative financing and private-sector cooperation.
The article notes that Bangladesh planned to form a sovereign wealth fund in 2017 using its foreign currency reserves to invest in infrastructure, but that plan was subsequently scrapped. Sovereign wealth funds are generally government-owned vehicles financed through transfers of foreign exchange assets and invested overseas over the long term.
In a separate meeting with KEXIM Chairman and Chief Executive Officer Hwang Kiyeon, the two sides reviewed the $3 billion Economic Development Cooperation Fund (EDCF) Framework Arrangement for 2023-2027. Priority projects discussed included the Dhaka MRT Line-5 Southern Route, the Matlab Uttar-Gazaria Bridge and the procurement of 260 broad-gauge passenger carriages. Bangladesh proposed a clear roadmap for the remaining EDCF resources and highlighted emerging areas such as AI, digital transformation, smart infrastructure and supply chains. KEXIM noted that EDCF priorities are currently under review and that project proposals would be considered in consultation with relevant Korean authorities.
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