The Export Readiness Fund (ERF) in Bangladesh launched new funding opportunities for businesses in the Leather and Leather goods, Footwear (both leather and non-leather), Plastics, and Light Engineering Sectors (electronics and electrical goods, automobiles and parts, bicycles, accumulators and batteries, foundry and dye and mould).
The ERF is a programme under the Export Competitiveness for Jobs (EC4J) project, under the Ministry of Commerce and funded by the World Bank Group.
The 4 sectors covered by the ERF have immense potential for export, and they are a prime focus of the government’s export diversification plans. The ERF was launched in January 2020 and will run till March 2023. The programme provides funding and guidance to businesses to meet environmental, social, and quality (ESQ) compliance standards so they can compete in global export markets.
The fund helps businesses to identify constraints, upgrade products and processes, and diversify products to have better access to export markets. Two new ERF funding windows opened on Wednesday. Window 2 provides smaller grants that cover business and technical services to meet ESQ standards. The maximum grant
size is US $40,000, with 40% minimum as recipient’s contribution. Window 3 provides grants that cover both service and fixed asset expenditures to meet ESQ standards. The maximum grant size is US $200,000, with 50% minimum as recipient’s contribution.
ERF windows 2 and 3 will support the upgrade of production plants, equipment, and services for target industries, to improve the design and quality of products so they are export ready, to marketing and distribution to promote ESQ compliance and environmental and social benefits of products, internal management to ensure ESQ compliance and companies to receive ESQ certification.
ERF Window 1 will fund ESQ assessments for 400 companies. It has already signed agreements with 165 companies and is in the process of signing with 183 more companies. These assessments will identify gaps in production processes and management capabilities that prevent applicants from meeting export standards.
Experts also provide guidance to meet these standards. Window 1 started in January 2020 and will continue till January 2021.
The Export Readiness Fund is one part of the larger Export Competitiveness for Jobs (EC4J) project implemented by the Ministry of Commerce with support from World Bank Group. EC4J aims to boost high-potential sectors and diversify the country’s exports beyond ready-made garments, which account for more than 80% of export earnings.
Export diversification is an important part of government strategy. Diversification is now particularly urgent for Bangladesh in light of the coronavirus pandemic, which has been catastrophic to the country’s RMG sector.
