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Plan to raise $1 billion through listing power companies at Singapore

The government is mulling to raise $1 billion in near future for mega power projects by issuing bonds of power companies into the stock market of Singapore.

Talking with the journalists at the sideline of a seminar on Sunday, State Minister for Power Energy and Mineral Resources, Nasrul Hamid said, such entry into a global stock market will not only enhance the transparency and accountability of the companies but also will create a ‘branding’ of Bangladesh.

It will also provide opportunity to the expatriate Bangladeshis for investing into a reliable global market, he added.

The seminar titled ‘Listing process of debt instruments in Singapore’ was jointly organized by Bangladesh Energy and Power Research Council (BEPRC) and Dhaka Stock Exchange (DSE) at Bidyut Bhaban.

When the journalist asked Nasrul that why the foreign investor would be interested in buying the bonds of Bangladeshi power companies as progress in some of the ongoing mega power projects is very slow, he replied that if we want to go to a global market, we need to disclose all the information.

“The more we become transparent, the less the corruption will be the companies will have to be transparent about disclosing their information to attract information.”

“Also in that way, it will increase their efficiency and accountability and when the companies increase those, the investor will be interested.”

The State Minister said that Bangladesh is now has a better rating than the other countries.

“I think it is the best chance to enter into a global market. We can brand our market as a secured market for investment.”

“For long, we have been very traditional. Now we need to think out of the box”, he added.

Nasrul said that, if we think out of the box, we can even create a financial product create out of bill collection. The two companies DPDC and DESCO collect Tk1,000 crore per month. If they can make that money a product and invest into the stock market, then it would increase the capital immensely.

“PDB has an asset value not less than TK 20,000 crore. Just thing how much capital could be raised if they go into the market.”

He said, our problem is that we can’t think out of the box. “Also we don’t have right people at right places. “If you put a person specializing into audit into the business development, then that person will never think of expanding the business”, he said.

Speaking on the occasion, Dr Ahmed Kaikaus, additional secretary and Chairman of BEPRC said, “We have roughly estimated that by 2040, we need $35 billion in power sector. Raising that amount through government mechanism is not possible”, he said.

He said, if we want to have that money from development partners, we have to go through stringent terms and conditions. Also if we want to have big investment, I think bank is not a very good solution in the long run.

“We have to go alternative financing. We have successfully implemented Export Credit Agency (ECA) financing.  Now we need to know more about the bond process. This is an Asian market. So we prefer Singapore because it`s near to our home and in terms of bond, Singapore market is one of the best”, he said.

Presenting the key-note paper at the Seminar, Farhana Siddiqui, Director, Corporate and Finance of Drew & Napier, a leading law firms of Singapore said that listing in Singapore is easier than other market.

Bangladesh is always a good country to invest. Every day I get four to five requests whether Bangladesh is going to issue any sovereign bond request or not, she said. “I think the market is ready for Bangladesh backed bond.”

Singapore will be a better option for Bangladesh as it is within Bangladesh’s geographical proximity and time zone.

“The problem with being listed with London and New York stock exchanges is the timing and trading hours, Here in Singapore, there is no such problem”, she said.

She also said that Singapore is one of the largest foreign currency exchange (FX) centres in Asia and issuers can efficiently convert their funds raised to their preferred funding currencies.

Secretary of Power Division Monowar Islam, and Professor Dr Swapan Kumar Bala, Managing Director of DSE were present at the occasion and delivered their speech.

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