Borrowing from abroad in foreign currency (commercial loan, buyer’s and supplier’s credit, etc. for the purpose of investment such as import of capital goods for new project, replacement or expansion of the existing production facilities, not for working capital purpose), requires prior approval by BIDA.
Applications shall be examined in terms of commercial viability, indebtedness and creditworthiness of the borrower, repayment period, debt-equity ratio, quality/ price/ economic life of procured capital machinery and equipment. BIDA shall attach priority mainly to the medium to longer term borrowing. Applications, after duly scrutinized, shall then be submitted to the Scrutiny Committee headed by Governor of Bangladesh Bank (BB) for final approval.
Applications filled in prescribed form shall be submitted to BIDA with the following supporting documents:
- Certificate of Incorporation with and Certificate of Commencement from Registrar of Joint Stock Companies & Firms (RJSC),
- Certified copy of the Memorandum & Articles of Association of the company,
- Form-X, -XII and -XV from RJSC (as a proof of authorized capital, paid-up capital, share-holding structure), *Paid-up capital shall be at least 30% of authorized capital.
- Copy of Registration Certificate with BIDA (full set),
- Term-sheet, Loan MoU, or Loan Agreement between the lender and borrower,
- Board's resolution related to the proposed borrowing,
- Feasibility report of the investment project,
- Financial analysis covering internal rate of return, break-even point, payback period, debt-equity ratio of the project, debt-service coverage ratio, for both base and sensitivity cases,
- Audited balance sheet, *The existing debt-equity ratio in the balance sheet (including proposed amount of borrowing) shall be at least 70:30.
- Utilization Certificate from the designated bank, which justifies estimated prices and quotation of the capital machineries, spare parts (by referring to the latest market prices), with submission of summary of the capital machineries (imported) and supporting document (such as proforma invoice, Bill of Lading, L/C copy),
- CIB Certificate on indebtedness or creditworthiness of the company and its sponsors/ directors from the designated bank, which specifies the date of search via CIB online,
- Credential of the sponsors/ directors, and
- Environmental Clearance Certificate.
The below shall be added for the Power Sector:
- Letter of Intent, Implementation Agreement, and Power Purchase Agreement