The Multilateral Investment Guarantee Agency (Miga) is backing loans to North-West Power Generation Company, Bangladesh’s state-owned utility company, for the development of the Sirajganj 2 power plant.
The loans are provided by Standard Chartered and Siemens Bank, though the total amount has not been disclosed. Miga’s guarantee covers US$68.9mn against the risk of default on sovereign financial obligations for up to 15 years.
The deal supports the construction and operation of the 220MW, dual-fuel (natural gas and high-speed diesel) combined cycle plant, which is expected to add 6,000MW of electricity to the Bangladeshi power grid by 2023.
According to Miga, private insurance was unavailable for the financing.
“Right now – and especially as we look into the future – Bangladesh faces an acute shortage of generation capacity,” says Miga’s executive vice-president and CEO Keiko Honda. “When 40% of the population has no access to energy, this is a major barrier to economic growth and human development.”
Ravi Suri, global head of project and export finance at Standard Chartered, adds: “Standard Chartered Bank is committed to the transformation of the Bangladesh power sector. 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.”