Design of Diaspora Bond for Bangladesh

Corporate Banking Products & Markets, Funding Solutions & Capital Markets, GBRW Consulting, GBRW Group, Sustainable & Development Finance

GBRW was engaged by the UK Department for International Development (DFID) to design a debt capital market product specifically focused on enabling access to finance for companies in Bangladesh.

The concept was to facilitate funding from the country’s large diaspora. The approach involved a field visit to Dhaka to engage with investor groups to assess their appetite for funding and flexibility considering terms and conditions. In parallel, GBRW worked with diaspora communities in the UK to assess their interest levels and investment requirements. Furthermore, detailed research was undertaken into the investment climate in Bangladesh, and the legal and financial implications of international bond issuance. In addition, a number of peer countries were identified and benchmarked for the theory and practice of issuing diaspora bonds. Finally, the findings were presented to DFID and the Government of Bangladesh in a number of stakeholder meetings, and synthesized into a major policy report.

Deliverables included:

- Field Mission to Dhaka followed by meetings with DFID in Dhaka and London;

- Determination of the interest levels and requirements of various investor groups including Diaspora communities;

- Benchmarking and lessons from peers in comparable developing countries;

- Charting of possible future courses of action for DFID and associated costs and implications;

- Assess the fundamental feasibility of raising international capital for investment in Bangladesh;

- Meetings with groups of Non-Resident Bangladeshis and Bangladeshi investment groups in the UK; and

- Research into areas listed in the Terms of Reference and delivery of Interim and Final Reports outlining recommendations to DFID and to relevant Government of Bangladesh bodies.