Bangladesh forms US$250 million refinance scheme for shipbuilding industry

31/05/2022

Bangladesh has formed a US$250 million refinance scheme to support the shipbuilding sector which become prey of the Covid-19 pandemic-linked global economic slowdown.

Under the scheme, the ship builders will get loans at 4.5%, the highest rate of interest for 12 years period with three years grace period.

The scheme is taken under the ‘Shipbuilding Industry Development Policy 2021’ to help recoup the promising sector which first exported an ocean-going vessel to a Danish company back in 2008.

Since then, Bangladesh exported 40 ships to various countries in Europe, Africa, and Asia.

However, the liquidity crunch and higher rate of interest rates on bank loans have slowed down the growth of the sector. So far, Bangladesh could earn US$180 million by exporting ships.

Abdullahel Bari, president of the Association of Export-Oriented Shipbuilding Industry of Bangladesh (AEOSIB), said the prolonged pandemic linked business slowdown has deepened the crises in the shipbuilding sector.

Bari’s company, Ananda Shipyard and Slipways Ltd will soon export a ship to Germany with an export value of US$7-8 million.

Bangladeshi shipbuilders were hit hard by the global recession a decade ago when some European buyers cancelled several export orders causing huge losses to the entrepreneurs.

Amid repeated calls from the shipbuilders, the government now came forward to help the sector and set a target to fetch US$4 billion through ship exports by 2025.

The government also plans to lower taxes to support the shipbuilding industry.

Source: Container News