Private Economic Zone Developers Seek Tk10,000cr Fund for Investment-Ready Sites

💼 Dhaka, Bangladesh — Private economic zone developers have sought a Tk10,000 crore government-backed low-cost fund to finance land development and essential infrastructure needed to make the designated industrial sites investment-ready.

🤝 The Private Economic Zones Association of Bangladesh (Pezab) has proposed initially setting up a Tk5,000 crore fund and gradually increasing it to Tk10,000 crore. Under the proposal, developers would receive loans at 4.5% interest for 15 years, including a four-year grace period, with developers contributing 30% of project costs as equity and loans covering the remaining 70%.

📊 Pezab made the proposal in a letter sent to Finance Minister Amir Khosru Mahmud Chowdhury on 24 August 2026, saying its members are struggling to implement private economic zone, export processing zone and hi-tech park projects because of high-interest, short-term commercial bank loans.

👥 Domestic and Foreign Interest, But Delays Persist

🌏 Pezab President ASM Mainuddin Monem said many domestic and foreign companies have expressed interest in setting up factories in private economic zones. However, delays in developing the zones are discouraging those investments.

💬 “Investment in private economic zones cannot be implemented with high-interest, short-term bank loans,” he said, adding that the demand for low-cost financing was raised following a decision at the association’s latest annual general meeting.

🏛 Under Pezab’s proposal, the fund could be created through government allocations, Bangladesh Bank’s own resources and low-cost financing from development partners. Commercial banks would receive refinancing from the proposed fund at 1% interest and lend to private economic zone developers at 4.5%.

🛠 What the Loans Would Cover

✅ The loans would cover:

• 📖 Land and site development
• 🛣 Roads and connectivity, including multimodal transport links
• 💧 Drainage, water supply, sewerage and water treatment
• 🌿 Sewage treatment plants and common effluent treatment plants (CETPs)
• ⚡ Electricity and gas networks, including renewable energy
• 🔥 Fire safety and waste management infrastructure
• 📦 Logistics, ICT and security systems

📊 Bangladesh has around 23 approved private economic zones, of which eight have received final certificates and are in commercial production. Several large industrial groups, including City Group, have invested substantial amounts in private economic zones and are now facing financing constraints, according to Pezab.

⚠ Strict Conditions to Prevent Misuse

🚫 The association said the proposed fund should not be used for speculative land holdings, share purchases, unrelated businesses or repayment of existing general loans. Loan defaulters would also be barred from accessing the facility.

🌿 Projects receiving loans would have to comply with environmental, social, labour, occupational health, fire safety and climate resilience requirements.

📈 Pezab proposed giving priority to projects where significant private equity has already been invested, industrial units or foreign investors have been secured, and completing the remaining infrastructure could quickly generate production, exports and employment.

💰 Structural Financing Disadvantage

📊 Monem said private developers face a structural financing disadvantage compared with government-developed economic zones, EPZs and hi-tech parks. Government projects benefit from public investment, budget allocations, state infrastructure and concessional financing, while private developers largely depend on their own equity and commercial loans.

⏱ Economic zone development requires large upfront investment and long construction periods, while cash flow begins gradually after factories start operations, he said. As a result, high-interest, short-term borrowing increases the cost of industrial land, delays infrastructure development and weakens the zones’ ability to attract domestic and foreign investors.

💬 “Although significant private capital has already been invested in many zones, the remaining infrastructure cannot be completed due to the lack of commercially viable financing,” Monem said.

🌏 Strategic Context for Bangladesh FDI

📈 The proposal comes at a critical juncture for Bangladesh’s FDI ambitions. As the country prepares for LDC graduation and seeks to diversify export-oriented manufacturing beyond ready-made garments, private economic zones are seen as a key vehicle to attract foreign capital into pharmaceuticals, light engineering, electronics, leather goods and agri-processing.

🤝 For the Bangladesh Economic Zones Authority (BEZA), the Pezab proposal aligns with its broader goal of developing 100 economic zones across the country. If the Tk10,000 crore fund is approved, it could unlock billions of dollars in stalled private investment, accelerate job creation in industrial heartlands, and help Bangladesh compete more effectively with Vietnam, India and Cambodia for next-generation export-oriented FDI.

💰 For investors and industrial groups eyeing Bangladesh’s growing economic zones pipeline, the Pezab fund could mark the difference between concept and reality — turning dormant industrial land into productive, export-generating manufacturing hubs within the next 3-5 years.