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Bank of Communications contributes $50 million to syndicated loan for the Chapainawabganj 100 MW Heavy Fuel Oil (HFO) Power Project
| Funder | China Bank of Communications (BoCom or BoComm) |
|---|---|
| Recipient Organization | Bangladesh Power Development Board (BPDB) |
| Country | Bangladesh |
| Start Date | May 25, 2015 |
| End Date | Feb 19, 2033 |
| Duration | 6,480 days |
| Number of Grantees | 1 |
| Roles | Recipient |
| Data Source | AidData Chinese Aid |
| Grant ID | 69292 |
Grant Description
Bank of Communications contributes $50 million to syndicated loan for the Chapainawabganj 100 MW Heavy Fuel Oil (HFO) Power Project On May 25, 2015, the Bangladesh Power Development Board (BPDB), the Hong Kong and Shanghai Banking Corporation (HSBC), and Bank of Communications signed a $112 million USD loan agreement.
The Bank of Communications reportedly contributed a $50 million USD export buyer's credit to this loan syndicate.
The loan covers 100% of the EPC costs and comes with full ECA cover from Finnvera and Sinosure. Associated costs and expenses have been financed under an uncovered facility. Finnvera is covering a total of $46.9 million USD with Sinosure guaranteeing the remainder. Both guarantees effectively reinsure a 100% sovereign guarantee from the Bangladeshi government, which owns BPDB.
China Export & Credit Insurance Corporation was the accountable party of the credit agreement.
The proceeds of the loan are being used to finance the EPC contract and turbine procurement from the Hubei Electric Power Survey and Design Institute and the Wärtsilä Corporation.
The $131 million USD project was sponsored by Bangladesh Power Development Board (BPDB) and it involved around $47 million USD for 12 Wartsila 20V32 heavy fuel oil engines, with the remainder covering EPC costs generated by Hubei Electric Power Survey and Design Institute, which is building the plant under a 450-day turnkey EPC contract and is providing a two-year warranty and a four-year service and maintenance contract.
Although the plant came with a relatively high generation cost (Tk21.70 per kilowatt-hour [kWh] as compared with between Tk6.0 and Tk18 per kWh for other Bangladeshi HFO plants), the project has significant political backing as it is part of Bangladesh’s Power System Master Plan 2010 and will help improve the overall electricity supply to export processing zones that have been established in the north-west of the country.
Implementation of this project began in May of 2015. This power plant was successfully connected to the grid on or around April 13, 2017.
Staff Comments
- The Chinese project title is 孟加拉国诺瓦布甘杰重油电厂项目.
- One source identifies the borrower as Bangladesh Power Development Board (BPDB). However, since this project appears to have been implemented as an independent power project (IPP), it is possible that this source is incorrect and the borrower of the loan was a project company (special purpose vehicle).
Sources & References
- Trade Finance Awards 2016
- 孟加拉诺瓦布甘杰项目开展主机厂家现场运维培训
- Asia Infrastructure Awards 2016
- Winning Ways: Asia's Best Capital Market Deals
- Deputation for participation in the Training on 'Operation & Maintenance' of Chapainawabganj 100 MW HFO Based Power Plant Construction, 【湖北院】孟加拉项目收到商务部批复
- 孟加拉诺瓦布甘杰100兆瓦重油燃机项目并网一次成功
- 中国电建孟加拉诺瓦布甘杰重油电厂项目融资获商务部批复
- BPDB'S CHAPAINAWABGANJ HFO-FIRED POWER PLANT
- HSBC: Energising the power sector
- Chapainawabganj 100 MW (BPDB) HFO Power Plant Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.
All Grantees
Bangladesh Power Development Board (BPDB)
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