Greenfield investment projects announced in Bangladesh dropped 59% during the first eleven months of the previous calendar year, according to a report by the United Nations Conference on Trade and Development (Unctad).
In 2022, Bangladesh received greenfield investment projects worth $376 million, which was a 59% drop from 2021 despite it being considered a reliable indicator of future foreign direct investment (FDI) trends.
Furthermore, the report revealed that international project finance deals announced in 2022 also fell drastically, by 97% to $117 million.
The number of project finance deals fell by 93%, from 14 deals in 2021 to just 1 deal in 2022.
Globally, the number of international project finance deals in 2022 was 42% lower than in 2019, with a 76% reduction in value.
The number of greenfield project announcements by multinational enterprises decreased by 55% over the same period.
The report released on March 6 highlighted that the impact of the ongoing global crises was evident across all types of investment flows.
This is a major concern for the least developed countries (LDCs), as greenfield investments and project finance deals are crucial for developing productive capacity and essential infrastructure, thus supporting sustainable development prospects.
FDI flows to LDCs showed a decline of about 30%, compared to a marginal increase in developing countries as a group.
The report notes that the succession of global crises, including floods, energy crises, financial distress, and debt, disproportionately affected investment flows to the poorest countries.
Despite this, extractive industries remain among the top sectors for international project finance deals and greenfield investments, highlighting the continued dependence of LDCs on these sectors and resource-driven FDI.
However, several LDCs are now diversifying their sectors.
Investment in LDCs in sectors relevant to the attainment of the Sustainable Development Goals (SDGs), including infrastructure, renewables, water and sanitation, food security, health, and education, suffered a significant blow in 2021-2022.
The decrease was evident in both greenfield project announcements and international project finance deals, highlighting the challenges that LDCs face in attracting foreign investment.