PRIVATE SECTOR DEVELOPMENT SUPPORT PROJECT BOOSTING BUSINESS WITH ECONOMIC ZONES APPROVAL DATE: END DATE: IDA COMMITMENT: IMPLEMENTING AGENCY: BASIC INFORMATION March 1 February 28 $172.8 million Economic Relations Division, Bangladesh 2011 2021 Export Zones Authority (BEZA), Bangladesh Export Processing Zones EFFECTIVE DATE: DFID GRANT: Authority (BEPZA), Bangladesh High-Tech August 3 $17.4 million Park Authority (BHTPA) 2011 OVERVIEW Bangladesh’s government-owned export processing zones (EPZs) positively promoted trade and investment by addressing land scarcity and other policy constraints. The Private Sector Development Support Project (PSDSP) helps the Government of Bangladesh develop a new generation of privately owned and developed economic zones (EZs) and hi-tech parks (HTPs). The government envisions to move from eight EPZs developed over a 40-year period to more than 100 EZs and HTPs developed over the coming decade. 52 CHALLENGE TOWARDS THE Lack of serviced land and quality infrastructure are binding constraints for greenfield investments in Bangladesh. The FUTURE topography and population density have led to a scarcity and high cost of land with much of the land being waterlogged The additional finance will build on or occupied. Additionally, an inefficient land administration system and deficiencies in urban planning have led to an the gains realized by the original opaque land market. Access to reliable power is another binding constraint and firms in urban areas report that they lose credit and contribute to enhancing on average 12 percent of their potential sales to electricity outages, which is more than any other country in the region. the quality standards in the zones and in their governing institutions. It will strengthen capacity to identify, plan, license, and negotiate PPPs APPROACH concessions to develop EZs as well as private EZs; construct last-mile The World Bank, together with UK’s Department for International Development (DFID) and IFC is supporting the Private Sector offsite infrastructure and shared Development Support Project to scale up support for the recently licensed and new economic zones to attract foreign and onsite facilities; and strengthen domestic investment as well as to create more jobs in the manufacturing sector. The project crowds in private investment in demand-driven skills formation EZ and HTP development through a public subsidy for last mile infrastructure and promotes compliance with international and encourage good social and quality standards, building codes, and good social and environmental practices. The project supports the government’s environmental practices. The goal of licensing 100 zones through private and public private partnerships by 2025, which will ultimately employ several move from a publicly driven to a million workers. It helps develop new EZs through identifying, licensing, and negotiating Public-Private Partnership for privately driven zone development economic zone development. It also supports civil works that connect new zones with major road, power and water arteries process will help rapidly expand and provides firm level training and process development to effectively collaborate with zone-based enterprises and their the footprint of serviced land for suppliers. The new EZs and HTPs will provide streamlined administrative procedures to businesses in both the manufacturing productive investment and thereby and service sectors. It is piloting initiatives to strengthen social and environmental compliance in Bangladesh’s existing Export accelerate economic growth. Processing Zones. EXPECTED RESULTS Generated Created more than 23,000 Generated more than $200 18 licenses issued to establish private $3 billion in direct jobs, of which 20% are million direct investment by zone sector-led Special Economic Zones (SEZs) private investment female workers tenant companies and High-Tech parks BEZA and BHTPA completed more than 50 site assessments, feasibility 20 companies certified with the ISO 14001 Environmental studies/master plans for new economic zones, with Mongla and Kaliakor Management Standard, and more than 50 firms certified with quality awarded as the first zone/park under the public private partnership regime standards such as ISO: 9001, ISO: 27001, CMMI-3, and CMMI-5 THE WORLD BANK IN BANGLADESH | 53