Dhaka, Bangladesh (BBN)– Three international development agencies are set to provide $210 million loan to develop a private sector gas-fired power plant to help Bangladesh address severe power shortages.
The three agencies – International Finance Corporation (IFC), Asian Development Bank (ADB) and Islamic Development Bank (IDB) — have offered the loan at LIBOR (London Inter-bank Offered Rate) plus 4.40 per cent for 15 years.
The loan will be used for development of the Bibiyana II 341MW gas-fired power plant, one of the largest independent power projects in Bangladesh.
Summit Industrial and Mercantile Corporation Ltd (SIMCL) owns 80 per cent of this project and the rest 20 per cent is owned by US conglomerate General Electric.
IFC and ADB will finance worth $75 million each while the IDB will provide rest of $60 million, according to the borrowers.
A signing ceremony in this connection was held at a local hotel on Tuesday.
The Bibiyana II Gas Power Project involves the design, engineering, construction, and operation of a 341 MW combined-cycle gas-fired power plant, located on the south bank of Khushiyara River, about 180 kilometers northeast of the capital city Dhaka.
Construction is expected to be completed by October 2015, and the plant will produce around 2,500 GW-hours of power annually.
To address power deficits, the government has a master plan to develop 12,000 megawatts (MW) of additional power capacity over the next five years to meet demand, increase its electrification rate and diversify its fuel sources including renewable energy.