Kolkata, India (BBN) – IFC (International Finance Corporation), a member of the World Bank Group, has roped in Japanese agency JICA to invest $30 million in Sembcorp North-West Power Company Ltd in Bangladesh.
Sembcorp North-West Power Company Ltd is a joint venture between Sembcorp Utilities and Bangladesh government owned North-West Power Generation Company Ltd. It is building a 414MW dual-fuel combined-cycle power plant at Sirajganj in Bangladesh, reports The Economic Times.
The plant will significantly expand power-generation capacity in Bangladesh.
JICA’s $30 million is part of the total financing package of $ 165 million that includes a loan from IFC’s own account as well as additional loans mobilised through partners.
The total project cost is estimated at around $412 million.
“The project is expected to be one of the most efficient plants in the country that will help modernize Bangladesh’s power sector,” JICA’s senior vice-president Kenichi Tomiyoshi said in a statement.
This transaction is IFC’s first co-investment with JICA since the two organizations signed a master cooperation agreement in April 2015.
Tang Kin Fei, group president and CEO, Sembcorp Industries, said, “Sembcorp’s commitment towards supporting Bangladesh’s vision for continued growth and development is further strengthened with support from JICA, IFC, and other global investors. Sembcorp’s Sirajganj power plant will provide cost-effective and reliable energy solutions to the country for more than 22.5 years after its completion.”
“Bangladesh is on an ambitious growth path. Addressing the electricity gap is an immediate need. With JICA’s first investment into the country, IFC is confident of making a positive impact on the economy and the quality of life of Bangladeshi people. The project will help address the electricity gap while lowering the cost of generation,” said Hyun-Chan Cho, IFC’s Asia-Pacific Head for Infrastructure.
Nearly 40 per cent of Bangladesh’s 160 million population live without access to electricity. Citizens encounter frequent blackouts.
Severe power shortages are a major bottleneck for the growth of the job-creating manufacturing sector, hampering economic growth and poverty-alleviation efforts.
The power plant will be the second largest power plant in the country and represents the largest foreign direct investment into this sector in recent years.
The success of the project will demonstrate the profitability and sustainability of public and private-sector partnerships in Bangladesh’s power sector to international players, helping attract additional capital to the sector.
IFC promotes sustainable growth and private-sector development in Bangladesh by investing in critical infrastructure, boosting financial inclusion, enhancing textiles competitiveness, and supporting reforms to make doing business easier for the private sector.
IFC committed $635 million in Bangladesh, in own and mobilized funds across 13 projects, for the fiscal year ended June 30, 2016.
IFC’s committed portfolio in Bangladesh is about $1 billion in 47 projects.