Investment Criteria and Parameters
In order to be eligible for funding from BIFFL, a project shall meet the following eligibility criteria:
- BIFFL shall consider only those projects for financing which will withstand the viability test from the commercial and socio-economic viewpoints. Viable projects may also include those projects that will become viable after receiving “Viability Gap Financing (VGF)” from the Ministry of Finance, Government of the People’s Republic of Bangladesh, as per approved “Guidelines of Viability Gap Financing for PPP Projects”;
- Subject to the availability of fund and the provision of clause 2.11.2 (iii), BIFFL will lend up to 40 percent of the total project cost or US$ 100 million whichever is lower for a single project..
- Any “For-Profit” or “Not-For-Profit” entity legally registered in Bangladesh or abroad at the time of submission of proposal(s) in response to Request for Qualification (RFQ) or Unsolicited Proposal(s) will be eligible to apply for BIFFL financing. However, at the time of contract signing, the foreign entity is required to be registered as a legal entity in Bangladesh;
- The project shall be implemented (i.e. developed, financed and operated for the project term) by a:
- i. Public Sector Company, with 51 percent or more of the subscribed and paid-up equity owned and controlled by the GoB, jointly or severally;
- ii. Private Sector Company, with 51 percent or more of the subscribed and paid-up equity owned and controlled by the private sector.
- A Private Sector Company not selected through a competitive bidding process would be eligible for direct lending by BIFFL only after the necessary statutory/ administrative approvals and clearances from relevant government agency/ authority have been obtained provided that-
- The service to be provided by the infrastructure project is regulated and non-monopolistic in nature;
- The project is being set up under an agreement with the Government or a public sector undertaking; and
- Total lending for such private projects does not exceed 25 percent of the lending program of BIFFL in any Fiscal Year (FY).
- Projects should be an integral part of the GOB’s priority plan for the relevant sector/sub-sectors;
- To ensure sponsor’s commitment to the project, equity should represent not less than 20 percent of the total project cost;
- Projects should meet GOB and BIFFL’s Environmental and Social Assessment Criteria;
- (i) In evaluating an investment request, the project itself is looked at initially. Important criteria for lending would include following aspects, among others for commercial projects:
- commercial viability;
- a sound business plan;
- a thorough appraisal report incorporating legal, technical, marketing, financial and environmental aspects
- proven and established operational, financial and governance track record, experience and expertise of the sponsors;