Patenga Container Terminal operation agreement to increase Saudi investment in Bangladesh stated the Prime Minister
Saudi Arabia is one of Bangladesh’s top trading partners in the Middle East. Over the past five years, relations between Bangladesh and Saudi Arabia have deepened, and Saudi investment in Bangladesh has notably increased. This economic success has extended Saudi Arabia’s perception of Bangladesh, moving beyond religious reflections to view it as a highly attractive investment opportunity.
Recently, entrepreneurs of the Kingdom of Saudi Arabia (KSA) have expressed their keenness to invest more in the country’s different sectors including energy, logistics, manufacturing and food.
The announcement was unveiled on Wednesday (6th December 2023) at an event marking the concession agreement between the Chattogram Port Authority (CPA) and Saudi Arabia’s company Red Sea Gateway Terminal (RSGT) to operate the newly built Patenga Container Terminal (PCT) on PPP-G2G basis for the next 22 years.
Officials Foresee Enhanced Saudi Investments
The collaboration between both countries has become increasingly essential as they pursue economic development and regional stability. State Minister for Shipping Khalid Mahmud Chowdhury and KSA’s Deputy Minister for Investors Outreach, Badr AlBadr, outlined key aspects during the event. Khalid Mahmud Chowdhury highlighted the agreement’s potential to fortify Saudi investments in Bangladesh, envisioning reinforced bilateral relations, specifically in trade and commerce.
“The deal will help further to enhance Saudi investment in Bangladesh,”
Khalid Mahmud Chowdhury
Badr Albadr echoed this stance, expressing Saudi entrepreneurs’ eagerness to invest in various Bangladeshi sectors, citing significant interest from prominent Saudi companies. He stressed Saudi Arabia’s plan to diversify investments, initially targeting specific sectors, and looking ahead to broader collaborations in addressing mutual challenges.
“We want to diversify our investment in Bangladesh. We’re looking forward to start with a few selected sectors, but in the future Saudi is going to collaborate in many areas with Bangladesh. KSA and Bangladesh will work together to resolve challenges in the future,”
Badr Albadr
Saudi Investment
- Target sectors
- energy
- logistics
- manufacturing
- food
Concession Agreement PCT Operation
The Patenga Container Terminal (PCT) stands as Bangladesh’s newest and most advanced facility, boasting a 500,000 TEU (Twenty-foot equivalent unit capacity). Notably, it marks the inaugural instance of international operator involvement in the bustling Bay of Bengal port. The agreement, formally signed between CPA Chairman Rear Admiral Mohammed Sohail and RSGTI CEO Jens O. Floe, signifies a pivotal moment in Bangladesh’s port infrastructure development.
Saudi Arabia has emerged as one of Bangladesh’s most dependable bilateral development partners, with the nature of their relationship evolving from a single-dimensional association to encompass diverse and multi-faceted cooperation initiatives over time. In this context, Jens O. Floe expressed enthusiasm about leveraging operational expertise to elevate Bangladesh’s primary gateway port’s performance.
Red Sea Gateway Terminal (RSGT) ‘s commitment, represented by Gagan Seksarna, to invest in PCT’s technological advancement, underscores the long-term vision of this partnership. With plans to infuse USD 170 million in equipment technology, including advanced cranes, PCT aims to handle an increased capacity, doubling its potential to accommodate larger vessels calling the Chattogram Port.
However, the Port of Chattogram’s ranking among the world’s Top 100 Container Ports and its status as Bangladesh’s primary port underscores its pivotal role in the nation’s trade landscape. With over 90 percent of Bangladeshi trade passing through Chattogram, this port stands as a critical gateway for the country’s economic activities.
Bangladesh Port Growth & Saudi Collaboration
- PCT: 500,000 TEU-capacity
- RSGT’s Investment: USD 170m
- Ctg Port: trade over 90%
- Ranked among Top 100 Container
Robust Cooperation Across Multiple Sectors
Saudi-Dhaka ties strengthen
The relationship between Saudi Arabia and Dhaka has undergone substantial evolution in recent years, characterized by increasing cooperation and a
shared understanding. This vibrant partnership has extended its reach into multiple sectors, encompassing trade, energy, defense, and cultural exchanges.
Economic Ties
In recent years, Bangladesh and Saudi Arabia have forged a robust economic partnership, surpassing $2 billion in bilateral trade in 2020. The close ties between the nations have seen high-level engagements, with Bangladesh’s Prime Minister making four visits to Saudi Arabia. This mutual commitment has led to unprecedented growth in relations, highlighted by multiple visits from key Saudi ministers in 2021, 2022, and 2023.
Saudi Arabia, known for its oil-rich economy and substantial investments globally, has shown increasing interest in Bangladesh.
The momentum continued with visits from prominent Saudi figures like Foreign Minister Prince Faisal Al Fahad in March 2022, and Mr. Majed bin Abdullah Al Kashab, Minister of Commerce, in March 2023. The latter visit resulted in a substantial $5 billion deal, further solidifying Saudi Arabia’s commitment to investment in Bangladesh.
This surge in Saudi interest and engagement, including the visit of Deputy Interior Minister Mr. Nasser Ad Dawood in 2023, is expected to not only foster economic development but also create numerous employment opportunities within Bangladesh.
Investment Opportunities
Saudi Arabia has shown a strong inclination towards investing in diverse sectors within Bangladesh, spanning energy, manufacturing, and telecommunications. These investments hold the promise of fueling economic expansion and supplying Bangladesh with essential capital required for pivotal development endeavors.
Energy Collaboration
Bangladesh and Saudi Arabia collaborate on energy, mainly oil and gas. Saudi Arabia supplies significant oil to ensure Bangladesh’s energy stability. Discussions persist on investing in Bangladesh’s energy infrastructure.
Saudi Arabia’s “Aqua Power” pledged USD 3.5 billion for Bangladesh’s power sector. A 730 MW plant is under construction, with plans for a 1000 MW solar plant. As ties grow, cooperation opportunities flourish.
Defense Cooperation
Saudi Arabia and Bangladesh have bolstered defense ties with agreements on training, exchanges, and military equipment sales, elevating Bangladesh’s defense prowess and promoting regional security.
Hajj Pilgrimage
Each year, 127,000 pilgrims undertake the Hajj, and around 400,000 perform Umrah.
In August 2023, Saudi Arabia’s Minister of Hajj and Umrah, Dr. Tawfiq bin Fawzan Al-Rabiyyah, visited Bangladesh with a delegation of 161, including another minister and three deputy ministers. The visits of these key Saudi ministers, including those responsible for Transport and Logistics Services, Foreign Affairs, Commerce, Interior, and Hajj and Umrah, signify the pinnacle of warmth in the relations between these two brotherly countries.
Humanitarian Aid
In the last three decades, Saudi Arabia has contributed over $124 billion in aid to low- and middle-income nations. The King Salman Humanitarian Aid and Relief Center executed 2,591 projects across 94 countries, spending over $6 billion. Notably, 52 initiatives in Bangladesh, costing more than $25 million, benefited over 6 million people. Additionally, $26 million funded 25 projects aiding Rohingya refugees in Cox Bazar.
Counterterrorism Efforts
Both countries have joined hands in the global fight against terrorism. Saudi Arabia and Bangladesh have cooperated on intelligence sharing and counterterrorism operations, contributing to regional and international security.
Migrant workers in Saudi Arabia
Approximately 2.8 million Bangladeshi expatriates are employed in various capacities in Saudi Arabia, and their foreign remittances play a pivotal role in Bangladesh’s development.
Diplomatic Initiatives
Saudi Arabia and Bangladesh have engaged in diplomatic dialogues to address regional and global issues. They share common interests in promoting peace, stability, and economic development in South Asia and the Middle East.
Conclusion
The collaboration between Saudi entrepreneurs and Bangladesh’s burgeoning economy heralds a promising era of mutual growth and cooperation. As these investments materialize and initiatives take shape, the foundation for a robust partnership between Saudi Arabia and Bangladesh is being laid, promising vast opportunities and shared prosperity for both nations.
