Standard Chartered has arranged a financing package of US$197mn for a power plant in Bangladesh.
Siemens Bank will co-finance the total, which will account for 80% of the required capital for North-West Power Generation Company Ltd (NWPGCL)’s combined-cycle dual fuel power plant near Sirajganj. The remaining 20% will come in the form of equity from NWPGCL.
The Multilateral Investment Guarantee Agency (Miga – the World Bank’s insurance arm), will provide a guarantee for US$69.5mn of the finance, as part of its efforts to stimulate private investment in low-income countries.
The guarantee provides coverage for up to 15 years against the risk of non-honouring of sovereign financial obligations, and is the fifth in a series of power projects being guaranteed in Bangladesh.
“The demand for electricity in Bangladesh is expected to grow by leaps and bounds over the next decade. Channelling consistent and long-term financing from the private sector through the support of our guarantees is critical,” says Keiko Honda, executive vice-president and CEO at Miga.
The plant is 130km northwest of the Bangladeshi capital, Dhaka. The completed plant will produce 1,649GW/h of electricity per year, in a country that suffers chronic power shortages. The 220MW facility will also generate the power at a lower cost than is presently available.
In January, GTR reported that Miga had provided coverage for a portion of the debt on Singaporean utility company Sembcorp’s US$409mn project financing package for a 414MW plant in the same region of Bangladesh. In that case, the lenders were the IFC, Clifford Capital – a Singapore-based project financier – and CDC Group – a development finance institution owned by the UK government. Each contributed US$103mn to the project debt.
Speaking on signing the latest international finance package for Bangladesh’s power sector, the global head of project and export finance at Standard Chartered, Surya Bagchi, says: “Standard Chartered is committed to supporting the development of the power sector in Bangladesh; we are working on a number of projects in Bangladesh across the power sector value chain and count on Miga’s continued support to help transform this sector.”
The engineering, procurement, and construction contract was awarded to the consortium of China National Machinery Import and Export Corporation (CMC) and Fujian Electric Power Survey and Design Institute (FEDI). Siemens AG will provide the gas turbine, steam turbine, generator, auxiliary systems and series to the project.