Bangladesh Bank has created a Tk 20 billion pre-financing fund for the export-oriented frozen food sector, according to a circular issued on Sunday. Funded from the central bank’s own resources, the three-year revolving facility aims to diversify exports, increase foreign-currency earnings, create employment and expand rural economic activity. The maximum interest rate for borrowers will be 7 percent.

The fund can finance processing and export-related activities involving frozen shrimp, fish and fish products, as well as other frozen foods. Eligible uses include buying raw materials, expanding and modernising factories, purchasing machinery, building cold storage facilities and restarting closed or partially operating factories. Financing is also available for solar power projects used in production, processing and storage, and for environmental damage mitigation.

Participating banks will pay 4 percent interest on pre-financing received from Bangladesh Bank before lending to customers at up to 7 percent. New factories may receive loans for up to seven years, including a one-year grace period, while renovation and modernisation loans may run for up to five years. Exporters with closed or partly closed operations due to working-capital shortages will receive priority, but defaulters and firms using similar ongoing public funds are excluded.