The FINANCIAL — IFC, a member of the World Bank Group, will provide $75 million financing to Summit Bibiyana Power Company Limited (SBIIPCL) for a 341 MW gas-based power plant in Sylhet that will bring low-cost electricity to three million domestic consumers.
Bangladesh faces acute shortage of power with only 60 percent of the population having access to electricity. Following IFC’s investment in this sector, the country is expected to have an additional 1000 MW of power capacity by 2017.
Asian Development Bank and Islamic Development Bank will also support the project, according to IFC.
The proposed investment fits well into IFC’s regional strategy in South Asia, which emphasizes inclusive growth, climate change adaptation and mitigation, and regional and global integration. The tenure of the loan, the largest given to a Bangladeshi power company by the three development agencies, is approximately 14 years.
“Apart from ensuring access to electricity for more people, the project will provide employment opportunities during construction and operational phases,” said Ayesha Aziz Khan, Director of Summit Group.
The China Northeast Electric Power Engineering & Service Co. Ltd. will operate the plant while BRAC Bank will oversee both account plus security – a landmark achievement in international financing for a local banking institution.
Summit Bibiyana II Power Company Limited has achieved long-term financial close of both debt and equity, the biggest financial close ever achieved by a Bangladeshi private power company. Summit Group, which also has investments in power generation, ports, and telecommunication, currently produces approximately 1200 MW of electricity.
“IFC’s investment in the power sector is crucial as it will send a positive signal to other potential private sector players in Bangladesh planning to develop efficient power projects aimed at expanding access to power,” said Kyle F Kelhofer, IFC Country Manager for Bangladesh.
IFC considers power a key priority area and has financed more than 320 power projects producing over 33,000 MW of power in over 60 countries.
“Enhancing access to power is central to Bangladesh’s vision of promoting sustained growth across sectors in the country and achieve mid-income status by 2021,” said Vivek Pathak, Director, IFC, Asia Pacific.
IFC is supporting several other independent power producers (IPPs), LNG suppliers, and power transmission projects to address existing shortages and growing needs of Bangladesh’s energy sector.
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