CDC, the UK’s development finance institution, has announced a new US$15 million debt investment in RFL Electronics Ltd (“RFL”), a Bangladeshi electronic goods company.
CDC’s capital will be used to acquire equipment for a state-of-the-art manufacturing facility producing consumer electronic goods for the local market.
The RFL manufacturing base is located 25km from Dhaka and will produce electronic appliances ranging from TVs and refrigerators, to rice cookers and electric irons, sold under the Vision brand in Bangladesh.
CDC is investing alongside Standard Chartered Bank Bangladesh who are providing an additional US$3m, for a total financing package of US$18 million.
CDC’s long-term investment will support the creation of 1,500 manufacturing jobs, half of which are expected to be for women.
With total employment expected to reach 2,500 over the course of CDC’s seven-year investment, RFL will hire experienced factory managers from Dhaka and other workers from neighbouring towns.
This is the CDC’s first direct corporate debt investment in Bangladesh and follows other recent financing for projects in the country including a US$103m investment in the Sirajganj-4 power plant and US$25m funding for Grameenphone, Bangladesh’s leading telecoms company.
Welcoming the investment, CDC’s Head of Corporate Debt, Richard Palmer said as Bangladesh’s economy grows they see their investment in RFL Electronics as an opportunity to create jobs, meet the growing demand for consumer goods and help the country boost its local manufacturing.
“Access to long-term debt capital in local and foreign currency remains limited in Bangladesh, so our investment plays an important role in helping the company grow by importing the equipment that will modernise RFL’s manufacturing base in Bangladesh.”
Uzma Chowdhury, Finance Director of Pran-RFL said consumer electronic goods can go a long way to improving people’s livelihood if they can be offered at affordable prices.
“RFL has been doing this since its inception in 1981. In order to make consumer goods more affordable, the industry needs to be set up within Bangladesh. CDC’s long-term debt at affordable cost allows us to manufacture electronics goods at a reasonable price and with high safety standards within Bangladesh. RFL Electronics Limited is a world class manufacturing unit where production goes on with maximum protection of the environment.”
CDC is working with the company to develop and implement an effective environmental and social management system that will deliver international standards in areas such as labour and working conditions, environmental management and fire safety
RFL Electronics is part of the Pran-RFL Group of companies which is a diversified conglomerate specialising in consumer goods such as food products, beverages, plastic goods and furniture.