Bangladesh sees decline in greenfield investments in 2022

BTJ Desk Report
Bangladesh sees decline in greenfield investments in 2022

The number of greenfield investment projects announced in Bangladesh fell by 59% during the first eleven months of the previous calendar year (2022), according to an analysis by the United Nations Conference on Trade and Development found that (Unctad).

Despite being regarded as a reliable predictor of future foreign direct investment (FDI) patterns, Bangladesh received greenfield investment proposals worth $376 million in 2022, a 59% decrease from 2021.

The survey also showed that the volume of global project finance deals announced in 2022 decreased significantly, by 97% to $117 million.

Project finance transactions decreased dramatically from 14 in 2021 to just 1 in 2022, a 93% decrease.

Worldwide, the volume of foreign project finance transactions fell by 76% in value and by 42% overall in 2022 compared to 2019.

Throughout the same time span, global corporations announced 55% fewer greenfield projects.

The study that was made public on March 6 noted that all kinds of investment flows were being affected by the ongoing global crisis.

This is a significant worry for the least developed countries (LDCs), as greenfield investments and project finance agreements are critical for enhancing infrastructure and supporting the possibilities for sustainable development.

FDI flows to LDCs decreased by around 30% while developing countries as a whole only slightly increased.

The paper highlights that investment flows to the poorest nations was disproportionately impacted by the string of global catastrophes, including floods, energy problems, financial turmoil, and debt.

The fact that the extractive industries continue to rank among the top industries for global project financing deals and greenfield investments, despite this, emphasizes how LDCs continue to be dependent on these industries and resource-driven FDI.

Nonetheless, a number of LDCs are currently diversifying their industries.

In 2021–2022, LDC investment declined significantly in areas critical to achieving the Sustainable Development Goals (SDGs), such as infrastructure, renewable energy, water and sanitation, food security, health, and education.

Both greenfield project announcements and international project finance arrangements showed a decline, underlining the difficulties LDCs have in luring in foreign investment.


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