Like many countries, Bangladesh has a long history of working in partnership with the private sector in the delivery of public services. There are examples from the 1970's and 1980's in the health sector of partnership between the public and private sector such as BIRDEM and the National Institute of Cancer Research & Hospital. While in the early 1990's KAFCO was established as joint venture multinational project for the production of fertiliser.
In the mid 1990's, the emphasis on working in partnership with the private sector gained further momentum by the adoption of a private sector based power generation policy. Recognising the market limitations on the availability infrastructure finance, a financing entity named IDCOL was established in 1997 as a state owned enterprise under the administrative control of the Economic Relations Division. Understanding there was a need for specialist expertise and support to develop and implement PPP projects, government established an additional institution, IIFC to assist relevant ministries, divisions or agencies to formulate and screen project proposals and provide technical assistance. To build on this initiative government introduced new Private Sector Infrastructure Guidelines in 2004 to widen private sector participation in other areas of infrastructure development.
The initiatives in the mid 1990 yielded early success with the execution of 2 power plants, the Megnaghat Power Plant and Haripur Power Plant. Thereafter, there has been some success achieved in the power sector with the launching of a number of other power plants as well as successful projects in the telecommunication sector, and some limited success in the port sector.
Although these initiatives had been successful in financing and implementing a few small-scale infrastructure development projects, the momentum generated in the late 1990's and early 2000's slowed in the years following and failed to deliver a pipeline of PPP projects across multiple sectors that were critically needed to meet Bangladesh's significant infrastructure capacity gap.