The Infrastructure Development Company Limited (IDCOL) was launched on 14 May 1997 as an infrastructure project funding organisation, set up under joint initiative of the government and the World Bank. Today marks IDCOL's silver jubilee. This was a five-and-a-half-year project created under a government development project and was supposed to have ended in 2002. Initiative was taken to shut down IDCOL by the finance minister Saifur Rahman in 2000 due to the failure to invest government funds and also because of the World Bank's new project in 2002, the Investment Promotion and Financing Facility. I find it most commendable that after all these ups and downs, this institution is observing its silver jubilee. I was involved in this institution as its first full-time CEO for nine years and as a member of its board of directors for three years -- that is, 12 years in all (1998-2010).
I shall discuss in brief about IDCOL's long journey in this country of short-term institutions and decaying government financial institutions. My book, 'Win: How Public Entrepreneurship can transform the Developing World', has detailed deliberations on the topic
Funding the Solar Home System was a big success of IDCOL. Under this programme, electricity reached around 1.8 crore people (12 per cent of the population) of 45 lakh households and small business in remote areas of the country
Growth of the organisation
IDCOL began with a paid-up capital of USD2000. In 2021 that principal amount and reserve increased to USD130 million (65,000 per cent growth). In 1998 IDCOL only had a workforce of only 5 which by 2021 stood at 423. At the same time IDCOL gave its owner, the government of Bangladesh, cash profit and bonus shares of USD 122 million, which was 27 times the amount of the USD4.5 million that the government had invested.
Up till 2021, IDCOL provided loans amounting to USD1.86 billion. Of this, USD640 million was invested in the renewable energy sector. Investment in the general power generation sector was USD550 million, which led to 2600MW capacity being added to the national grid. Other than this, IDCOL's investment to other infrastructure projects totalled USD666 million. Also, other than direct investment, IDCOL leveraged capital and loan assistance of USD3.5 billion for various business establishments, NGOs, multinational banks as well as local and foreign commercial banks.
Solar Home System programme
Funding the Solar Home System was a big success of IDCOL. Under this programme, electricity reached around 1.8 crore people (12 per cent of the population) of 45 lakh households and small business in remote areas of the country. This figure is part of the government's declaration of 100 per cent success in electrification. This is known to be the largest and most successful solar power programme in the world. Several countries in Africa have followed the IDCOL model in implementing solar power programmes.
Leading up to success
IDCOL's journey was not smooth at the outset. Due to the World Bank's unrealistic procurement procedures and the lack of government-approved infrastructure projects to be implemented in the private sector, IDCOL only could invest USD80 million of the USD220 million provided by the World Bank, in the 450MW Meghnaghat power generation project. As a result, the World Bank shifted the remaining amount to the flood rehabilitation project. Later IDCOL invested in small infrastructure projects and succeeded in getting funds from Asian Development Bank and other institutions. So if IDCOL is to be objectively evaluated, the following factors must be taken into consideration:
1. Amid the existing inefficiency and unreliability of the government sector organisations, this success of IDCOL stands out as an exception.
2. IDCOL attained this success working with NGOs, private companies and educational institutions. Such an example of success working with such organisations all at the same time is rare worldwide and in Bangladesh.
3. Being an urban financial institution, IDCOL funded power facilities in remote areas. Generally speaking, financial institutions avoid such social financing.
4. Generally, local organisations approach donor agencies for assistance. But within a very short time IDCOL became a favourite among the donor agencies and they too were eager to share in the good reputation of IDCOL's programmes.
As a result, even though it started out as a project with a limited term, IDCOL down till today continues to carry out its programmes with success.
Perhaps IDCOL is the only government organisation of the country where the appointment letter mentions the condition of being corruption-free
Reasons for success
I will mention four reasons here behind IDCOL's success
1. The institution managed to remain above Bangladesh's bipartisan political conflict. Former prime minister Khaleda Zia and the present prime minister Sheikh Hasina were chief guests at IDCOL's 50,000th and 10 lakh Solar Home System financing event. Former finance minister M Saifur Rahman initially had misgivings about IDCOL, but later became its biggest patron. The next finance minister Shah AMS Kibria also was a patron of IDCOL.
2. We were successful in establishing IDCOL as a corruption-free institution. Perhaps IDCOL is the only government organisation of the country where the appointment letter mentions the condition of being corruption-free.
3. The IDCOL board of directors and its management team have worked seamlessly. I recall that as CEO, I would get into heated debate with the senior members of the institution's first board of directors, in the interests of the institution. We rejected many recommendations of the World Bank. They gave me that leverage. But in all cases, we would discuss matters and take the decision which was the best for the institution.
IDCOL has some failures too. For example, the failure to have an exit strategy in time for the Solar Home System programme, resulted in a lot of unrecovered loans. Of course, the government programme to provide the Solar Home System for free was also responsible for this. Loans on certain projects also went into default due to political pressure and corruption in the project.
On the silver jubilee of IDCOL, I offer my greetings to its founding chairman Dr Mashiur Rahman, the former chairmen and present chairman, former and present board members, officers and employees, the World Bank and other donor agencies, NGOs, borrowers, academics and everyone. Finally, I pray that IDCOL lasts another 100 years and even more!
* Muhammad Fouzul Kabir Khan is a former secretary the first full-time CEO of IDCOL
* This column appeared in the print and online editions of Prothom Alo and has been rewritten in English by Ayesha Kabir