Bangladesh is set to explore a new credit-guarantee facility offered by the World Bank Group’s Multilateral Investment Guarantee Agency (MIGA) to support trade financing for essential imports, following formal endorsement from the government and the central bank.

Officials confirmed that a visiting MIGA delegation last month held detailed discussions with Bangladesh Bank, the Finance Division, and other state agencies on structuring a credit-enhancement guarantee arrangement that would help facilitate the import of key commodities such as food, fertilisers, and medicines.

The proposed facility aims to provide financing support without creating new liabilities on the central bank’s balance sheet, an approach both the Finance Division and Bangladesh Bank have agreed to. The central bank governor has also committed to updating the International Monetary Fund (IMF) on the planned arrangement and to advancing the process.

MIGA, which provides political risk insurance and credit guarantees to mobilise private investment, is expected to play a facilitating role between commercial lenders and Bangladesh’s import agencies. Discussions have already taken place with the Ministry of Agriculture regarding fertiliser imports, and further talks are planned with the Bangladesh Agricultural Development Corporation.

This initiative complements existing financing from the Islamic Trade Finance Corporation (ITFC), Asian Development Bank (ADB), and the World Bank, which currently support imports of petroleum, LNG, and food.

MIGA also submitted a separate proposal earlier this year to provide up to $350 million annually in revolving letters of credit to support LNG imports by state-run Petrobangla.

However, the Ministry of Energy has sought $500 million on more concessional terms due to concerns over cost competitiveness compared to other sources of trade financing.

MIGA is now expected to resume internal processes and engage commercial lenders to operationalise the facility.