- Date written
- August, 2023
- Contact for guarantco
- Marjolein van Kampen
- Communications Director
- +44 (0)738 8857097
GuarantCo, part of the Private Infrastructure Development Group (PIDG), provides Runner Automobiles with a 100 percent guarantee for issuance of an internationally certified sustainability bond worth BDT 2.67 billion (c. USD 27 million). The bond aims to facilitate access to credit for borrowers who wish to own lower emitting three-wheelers including electric powered three-wheelers. Furthermore, a proportion of the bond’s proceeds will be allocated towards installing a 3.4MW greenfield rooftop solar system at the manufacturing plant.
This landmark achievement represents the first internationally certified sustainability bond issued by a local business in Bangladesh. The bond garnered subscriptions from local private sector institutions and insurance companies. MetLife Bangladesh is a major investor in this bond whilst Green Delta Capital acted as the lead arranger and security agent on the transaction.
By providing credit access, this initiative will grant an opportunity for around 7,000 drivers to become owners of three-wheelers, leading to income-generating prospects for drivers and downstream vehicle maintenance companies. It is anticipated that these three-wheelers will offer taxi services to approximately 50,000 people in rural and urban areas of Bangladesh.
In addition to making an employment generating product more affordable for lower-income consumers in the country, the transaction is also Paris aligned as it will facilitate the implementation of the Government of Bangladesh’s transport and climate strategy. Furthermore, the rooftop solar facility installed as a component of the transaction will significantly reduce reliance on grid and backup diesel generators, lowering the carbon footprint, and the three-wheel vehicles backed by the transaction represent an environmental improvement compared to other vehicles relying on other fossil fuels.
Layth Al-Falaki, CEO of GuarantCo, said:
“We are delighted to have closed our third transaction in Bangladesh which will further develop the country’s bond market. The transaction will make a direct contribution to SDG 11a which seeks to improve economic and social links between urban, peri-urban and rural areas and SDG 8.5 which aims to achieve full and productive employment and decent work for all women and men.”
Subir Kumar Chowdhury, CEO of Runner Automobiles PLC, said:
“Since inception, Runner Automobiles PLC has endeavoured to introduce advanced and environment-friendly technologies to the automobile industry of Bangladesh and create a sustainable impact in the transportation sector. Like 2-wheeler manufacturing, Runner has also pioneered the local manufacturing of world-renowned Bajaj 3-Wheeler in its state-of-the-art automobile manufacturing plant in Bhaluka, Mymensingh. To expand this eco-friendly mobility solution, Runner has joined hands with GuarantCo for issuance of a sustainability bond worth BDT 2.67 billion, the first ever internationally certified bond in Bangladesh. Under the scheme, Runner will extend credit to its customers to facilitate purchase of the eco-friendly CNG/LPG and Electric 3-Wheeler that will generate self-employment for thousands of people to earn living for their families. A portion from the fund will be spent to install a 3.4MW greenfield rooftop solar system at the Runner’s automobile manufacturing plant.”
Ala Ahmad, Chief Executive Officer of Metlife Bangladesh, said:
“Our investments in Bangladesh continues to grow and we are proud to be a partner in launching the country’s first sustainability bond. This landmark investment demonstrates our confidence in the growth and prosperity of Bangladesh and its potential to become a more developed financial market.”
Md. Rafiqul Islam, Managing Director and CEO of Green Delta Capital Limited, said:
“Being the lead arranger and advisor on the transaction, I would like to thank everyone for successful closure of the deal. I am thrilled and at the same time proud of the fact that we have achieved a new milestone by bringing a sustainability bond in Bangladesh. With this issuance, we are not only contributing our dedication to addressing global challenges but also leveraging our businesses for positive change. This is not just a financial transaction, it is a testament to our purpose-driven approach and an opportunity to make a meaningful difference.“