Dhaka: The government has approved the International Finance Corporation’s proposal for the first-ever offshore Taka bond programme worth $1 billion, aiming to strengthen capital markets and increase foreign investment in Bangladesh.

IFC, a member of the World Bank Group, announced that it has received an approval from Bangladesh’s Ministry of Finance for the first-ever offshore Taka bond program, said a press release on Sunday.

Under the programme, IFC will issue the first Taka-linked bonds in the offshore market and bring the proceeds back to finance investment in Bangladesh. The bonds will be listed on the London Stock Exchange.

‘Domestic capital markets are critical to providing long-term, local-currency finance for the private sector-which plays an essential role in job creation in emerging markets,’ said Jin-Yong Cai, IFC’s Executive Vice President & CEO.

‘IFC’s offshore bond programme will help bring depth and diversity to Bangladesh’s capital markets and create an alternative source of funding for Bangladeshi companies,’ he said.

IFC’s work in Bangladesh supports the World Bank Group’s goals of ending extreme poverty and boosting shared prosperity. As of 30 June 2015, IFC’s investment portfolio in Bangladesh for its own account and that of participants was nearly $800 million.

IFC has built a strong pipeline of private sector projects in key industries such as sustainable energy, power generation and banking.

This programme follows IFC’s groundbreaking Masala bond programme launched in 2013. To date, IFC has sold Indian Rupee 106 billion (or

$1.7 billion) bonds to international investors.

The bonds range in tenor from three to ten years and created an international triple-A yield curve for the offshore Rupee markets. The Reserve Bank of India has now allowed Indian companies to issue offshore Rupee bonds, expanding access to international capital markets for local firms.

IFC has, over the years, launched various bond programmes, aiming to strengthen local capital markets and finance projects in emerging markets. So far, IFC has issued bonds in 17 local emerging market currencies such as Armenian Dram, Chinese Renminbi, Indian Rupee, Peruvian Soles and Zambian Kwacha.