PRAN-RFL signs $25m EU-guaranteed financing deal with DEG
Banga Building Materials Ltd (BBML), a concern of PRAN-RFL Group, has signed its fourth financing deal with DEG-Deutsche Investitions -und Entwicklungsgesellschaft mbH, a German development finance institution.
BBML started commercial operation of manufacturing products in 2008 on its own industrial park at Shayestaganj, Habiganj. Since then, the company has been continuing its operation with its popular product line including different types of PVC Door, Fittings, Electrical Switch & Socket, Fan, Energy Saving Bulb, Melamine, Stationery, OPAL and Recycled Plastic Products.
DEG is a German Development Finance Institution and a subsidiary of KfW Group. It provides long-term financing and support to private companies in developing and emerging countries, to promote sustainable economic growth and private sector development. Established in 1962, it offers loan, equity, and advisory services, acting as a key player in financing sustainable investments and contributing to achieving the UN Sustainable Development Goals (SDGs).
DEG has been a trusted partner of BBML since 2013, and the collaboration has reached a new milestone with the signing of their fourth loan agreement. The new financing will be used for the expansion of BBML’s operations on increasing output of recycled products and soft PVC items such as PU Leather, Floor Mats, and PVC Ceiling Board, while introducing new products like Household Cleaning Brushes for export to the US and European markets. The total cost of the project is $29 million where DEG will finance $25 million to cover the import of capital machinery and raw materials. The DEG loan will be partially guaranteed by the European Union’s EFSD+ (European Fund for Sustainable Development Plus). The EU EFSD+ Guarantee Program is the EU's key financial tool under its Global Gateway Initiative, offering up to €40 billion in guarantees to mobilize €135 billion in sustainable investment in partner countries, using risk-sharing with EIB, DFIs, and other partners to fund green, digital, health, and SME projects, especially in challenging markets.
BBML currently employs approximately 9,500 people, and with this financing, the company’s new expansion at Habiganj Industrial Park is expected to create an additional 1,000 jobs.
The signing ceremony took place on Thursday at PRAN-RFL Group’s Head Office in Dhaka, Bangladesh. Uzma Chowdhury, Director (Corporate Finance) of PRAN-RFL Group and Parvez Akhter, Vice President, Industries and Services, Asia of DEG, signed the agreement on behalf of their respective organizations.
Speaking about the signing ceremony, Ahsan Khan Chowdhury, Chairman and CEO of PRAN-RFL Group, said “We are delighted to have DEG as our partner and adviser. DEG’s support is a strong endorsement of our vision. With this financing, we are ready to produce import substitute products in the country by using local and foreign resources while creating employment in rural areas.”
In her message to this occasion, Monika Beck, Chief Investment Officer and Member of the Management Board of DEG stated: “DEG is committed to fostering sustainable development within the private sector of developing countries and emerging markets, including Bangladesh. For many years, we have been supporting the sustainable growth of Banga Building Materials Limited through our financing solutions and Business Support Services Program. This agreement reflects the strength of our long-term partnership and underscores our shared commitment to continued collaboration.”
Michal Krejza, Minister Counsellor and Head of Cooperation at the European Union Delegation to Bangladesh remarked: ‘’This is an important moment for the European Union’s cooperation with Bangladesh, as this is the first EU guarantee for a private sector loan in this country. It reflects our objective to work increasingly with private businesses such as PRAN-RFL to drive innovation and create jobs under our Global Gateway Initiative.
Ulrich Kleppmann, Counsellor, Head of German Development Cooperation, German Embassy Dhaka, RN Paul, Managing Director of RFL Group, Hubert Blom, Attaché-Program Manager, Circular Economy, Private Sector & Environment, European Union Delegation to Bangladesh, Fahmeda Ahmed, Country Representative (Bangladesh & Nepal), Faiyaz Hossain, Investment Manager of DEG and Shams Arefeen, Analyst of DEG were also present at the signing program.