This note provides high-level, non‑advisory guidance for international sponsors, lenders and advisers considering industrial project finance involving assets in Bangladesh. It is prepared by the firm’s London office at Holborn Gate, 330 High Holborn, London, WC1V 7QH, England, to identify common structures, principal legal and commercial risks and practical steps advisers typically take on such transactions.

Common financing structures and contractual building blocks

Industrial project financings in emerging markets commonly use limited‑recourse or non‑recourse project company structures. Typical features include:

• Special purpose vehicle (SPV) incorporated in Bangladesh to hold the project and enter project agreements;
• Construction contract (EPC) with fixed price / turnkey obligations and performance bonds;
• Long‑form offtake or concession/PPP agreements where relevant (power, ports, toll roads);
• Finance documents: facility/agreement, intercreditor arrangements, security package (onshore assets, shares, bank accounts), and direct agreements with key counterparties;
• Political and commercial risk mitigation: guarantees, sponsor support, export credit agency cover and/or multilateral insurance (for example, MIGA).

Key legal and commercial risks to address

International lenders and sponsors should focus on risk allocation, enforceability and practical execution:

• Currency and convertibility risk — mechanisms for tariff indexation or hedging and practicalities of repatriation;
• Permitting, land acquisition and environmental/social approvals — timing and conditions precedent for disbursement;
• Enforceability of security and judgments — strength of security over land, plant and receivables, and enforcement routes under local law vs arbitration awards;
• Regulatory change and tariff/contract renegotiation risk — contractual protections and renegotiation mechanics;
• Construction and operational risk — clear EPC performance standards, liquidated damages, and step‑in rights for lenders;
• Local content, employment and tax incentives — compliance and potential impact on project economics.

Practical transactional checklist

1. Engage reputable local counsel early to verify corporate, land and regulatory title, and to advise on enforceability of security.
2. Confirm the project SPV corporate authorisations and local licensing requirements and sequence them as conditions precedent.
3. Assess foreign exchange and repatriation rules and design hedging or contract indexation accordingly.
4. Negotiate robust direct agreements (EPC, offtake, O&M) with assignment and step‑in provisions for lenders.
5. Structure a comprehensive security package and test enforcement scenarios under local procedure.
6. Consider multilateral/ECAs for political risk cover and possible support from bilateral investment treaties where applicable.
7. Ensure environmental and social due diligence meets financiers’ standards; plan for monitoring and reporting obligations.

Jurisdiction and sources

For primary, authoritative materials consult the relevant governmental and regulatory bodies in Bangladesh and internationally, for example:

• Bangladesh Bank (central bank)
• Bangladesh Investment Development Authority (BIDA)
• Securities and Exchange Commission, Bangladesh
• Ministry of Power, Energy and Mineral Resources (where applicable)
• National Board of Revenue (tax authority)
• Multilateral Investment Guarantee Agency (MIGA) and relevant export credit agencies

Local law, regulatory practice and the facts of each project vary. Early engagement with local advisers and lenders’ counsel is essential to confirm the applicable approvals, statutory timeframes and enforcement processes.

General information only; not legal advice and not a substitute for advice on a particular matter.