Port Infrastructure Project Financing Challenges for Private Investors in Bangladesh

Iftear Ahmed Chowdhury and Fahim Faisal

Building sustainable and reliable port infrastructure is critical for increasing economic growth for Bangladesh. Worldwide, private sector investment through Public-Private Partnerships (PPP) has been appreciated as an important way out for Port infrastructure financing. Although for PPP financing there have been recent successes in regulatory and institutional framework development for Bangladesh, most of the port PPP projects face different financing challenges including developing a financially feasible and bankable project, addressing the technical concerns of lenders, and finalizing the commercial structure. Therefore, it is essential to evaluate the effectiveness of the existing Port project financing mechanism in Bangladesh. This paper analyses the selected port PPP projects in Bangladesh to draw lessons in the perspectives of the institutional, regulatory, project financing, and other policy-relevant issues. With that objective, a group of forty five experts from organizations engaged in infrastructure financing in Bangladesh has been interviewed. The paper finds that for ensuring the bankability of an infrastructure project, it is essential to obtain government support for port PPP projects.