Bank of Communications contributes to $333 million syndicated debt financing package for Ghorasal Unit 3 Re-Powering Project

Project narrative

On February 2, 2016, Bangladesh Power Development Board signed a set of syndicated buyer’s credit facility agreements with the Bank of Communications (Beijing Branch) and HSBC for the Ghorasal Unit 3 Re-Powering Project. These facility agreements are backed by a sovereign guarantee (issued on May 11, 2016) and supported by credit insurance policies from China Export & Credit Insurance Corporation (Sinosure), the World Bank's Multilateral Investment Guarantee Agency (MIGA), and Swiss Export Credit Agency (SERV). The Sinosure-backed facility carries a 13-year maturity, an interest rate of 6-month LIBOR plus a 3.5% margin, a 1% management fee, and a 1% commitment fee. The purpose of the project is to rehabilitate a 210MW power (steam-turbine) unit and construct a 260MW gas turbine (GT) unit at the existing Ghorashal power station in Narsingdi. The project also involves the procurement and installation of a heat recovery steam generator, power evacuation system, water treatment plant, step-up transformer, and switch gear. China National Machinery Import and Export Corporation (CMC) and Switzerland’s Alstom were the EPC contractors responsible for project implementation. The project officially commenced in March 2015 and was originally expected to reach completion by December 2017. However, by September 2016, only six test pilings and 20 pilings of heat recovery steam generator (HRSG) had been completed. By January 2017, the project had only achieved a 4% physical progress (completion) rate and the project site had not yet been handed over to the EPC contractors. Nevertheless, the power plant was put into operation in January 2018.