Bangladesh seeks Korean investment beyond loans, with a $1-2 billion sovereign fund discussed

Bangladesh wants to strengthen its economic partnership with South Korea, expanding cooperation beyond conventional development loans into investment, advanced technology, artificial intelligence (AI) and infrastructure.

As part of that, the formation of a possible Bangladeshi sovereign fund worth 1 to 2 billion dollars was discussed with the Korea Investment Corporation (KIC), the country's state investment institution.

The issues came up in meetings between a Bangladeshi delegation led by Finance and Planning Minister Amir Khosru Mahmud Chowdhury and South Korean government officials, financial institutions, technology companies and private sector representatives on the second working day of the delegation's visit to South Korea. The finance ministry said in a press release that the talks were held in Seoul on Tuesday (November 3).

According to the statement, talks with the KIC covered the possibility of bringing institutional investment into commercially viable sectors in Bangladesh, including infrastructure, renewable energy and digital infrastructure. A Bangladesh sovereign fund with a possible size of 1 to 2 billion dollars was considered as a potential vehicle for that investment. Combining KIC equity investment with financing from the Export-Import Bank of Korea was also discussed, along with the involvement of Korean fund managers.

Earlier, at a meeting with Hwang Ki-yeon, chairman and chief executive of the Export-Import Bank of Korea (KEXIM), the 3 billion dollar Economic Development Co-operation Fund (EDCF) framework for 2023 to 2027 was reviewed. Priority projects under the framework were discussed: the southern route of Dhaka MRT Line-5, the Matlab Uttar-Gazaria bridge and 260 broad-gauge passenger coaches.

According to the finance ministry statement, KEXIM said the EDCF priority projects are currently under review. The project proposals will be considered in consultation with the relevant Korean authorities. Bangladesh proposed preparing a clear roadmap for using the remaining EDCF money.

Bangladesh also raised cooperation in new areas such as AI, digital transformation, smart infrastructure and strengthening supply systems. At a meeting with Chang Huh, second vice minister of South Korea's finance and economy ministry, taking the bilateral economic relationship to a broader and more strategic level was emphasised. Cooperation possibilities in trade, investment, advanced manufacturing, energy, shipbuilding and digital technology were discussed.

Bangladesh welcomed Korea's ongoing technical assistance in preparing the masterplan for the Integrated Growth and Development (IGND) initiative supported by the Asian Development Bank (ADB). It also called for Korea's wider participation in financing and implementing the initiative. The Korean side expressed interest in continuing the discussions.

New possibilities for cooperation between the two countries in the AI sector were also discussed. At a meeting with LG AI Research, building a large language model (LLM) suited to Bangladesh's language and culture was raised, along with the use of AI in education, healthcare, manufacturing and government services. Bangladesh's aspiration to become a regional AI and data centre hub was also presented.

In talks with FuriosaAI, strengthening Bangladesh's high value-added AI ecosystem was emphasised. KEXIM also showed interest in exploring the possibilities of AI-linked infrastructure projects.

The Bangladeshi delegation also discussed Korean private sector investment. With Samsung C&T, cooperation possibilities in infrastructure, renewable energy, urban development, tourism and public-private partnership (PPP) projects were discussed. Selected urban development initiatives, including rooftop and large-scale solar power projects, also came up. The company expressed interest in moving from engineering, procurement and construction (EPC) contracting alone towards long-term investment. Both sides agreed to continue technical discussions on priority projects.

At a meeting with Korean investors hosted by Youngone, the potential of Bangladesh's light engineering and parts manufacturing sector was presented. Joint ventures, technology transfer and linking Bangladeshi suppliers into Korea's supply value chain were called for.

The release further said that in the talks, both countries expressed interest in building a broader partnership based on trade, investment, technology and mutual economic opportunity, going beyond the bounds of conventional development cooperation. Both sides agreed to continue consultations to turn these discussions into real projects and investment partnerships.