The government plans to raise funds for state-run power companies by issuing bonds in Singapore's debt instrument market, the state minister for power said yesterday.

“We will need around $24 billion investment in the power sector, and the money will come from the banks and the ECF programme,” said Nasrul Hamid Bipu, referring to the seventh five-year plan.

But the banking sector is not the proper place to get money for big investments, Bipu said. “We are thinking of raising the funds by selling our own securities with our own reputation and brand image.”

A bond is a debt instrument issued by a company for a period of more than one year with the purpose of raising capital by borrowing. Usually, a bond issuer is promised repayment of the principal along with interest on a specified date.

Bipu spoke at a seminar on the listing of debt instruments in Singapore, co-organised by the Bangladesh Energy and Power Research Council and Dhaka Stock Exchange.

Bangladesh is looking at the Singapore market, as it is easier than London and New York markets to access. “Singapore is a quite known market for Bangladesh, and Singapore also knows about Bangladesh,” he said.

“Our country rating is good, and we have some big companies such as DESCO, DPDC, BPDB and REB. So, there is a huge opportunity for us in the Singapore market.”

He said the issuer companies will also be more transparent and accountable, as these will have to disclose all information to the investors. “The more transparent the companies become, the more corruption will be curbed,” Bipu said, adding that the efficiency of the companies will also increase.

The success of the bond issuing and repayment will also attract foreign investors to invest in Bangladesh. “We will not need to attract them, they will come on their own,” he said.

Farhana Siddiqui, corporate and finance director of Drew and Napier, a Singapore-based law firm, highlighted the key features of Singapore bond market and its listing process in her keynote paper.