Bank of China contributes to $280 million syndicated loan for 420MW Mymensingh Dual Fuel (Gas/HSD) Combined Cycle Power Plant Construction Project

Project narrative

On September 21, 2021, Rural Power Company Limited (RPCL) — an autonomous government company responsible for rural electrification and power in Bangladesh — signed a $280 million syndicated loan agreement with Bank of China and the Singapore Branch of Sumitomo Mitsui Banking Corporation (SMBC) for the 420MW Mymensingh Dual Fuel (Gas/HSD) Combined Cycle Power Plant Construction Project. The loan carries a 12-year maturity. However, its other borrowing terms are unknown. The borrower was expected to use the proceeds of the loan to finance a commercial (EPC) contract between Harbin Electric International Company Ltd. (HEICL) and RPCL, which was signed on October 31, 2019. The loan is backed by a sovereign guarantee (issued on January 15, 2020) and a credit insurance policy (that went into effect on October 27, 2021) from China Export & Credit Insurance Corporation (Sinosure) as well as a credit insurance policy from Euler Hermes. The purpose of the project is to construct a 420MW dual fuel (gas/HSD) combined cycle power plant in Shambhuganj within Mymensingh district. The project consists of 1 steam turbine with 140MW nameplate capacity and 1 gas turbine with 280MW nameplate capacity. The primary fuel that will be used to power the plant is natural gas. However, in the event that there is insufficient natural gas, the plant will run on high speed diesel (HSD). The fuel will be procured from Petrobangla. HEICL is the EPC contractor responsible for project implementation. Its EPC contract went into effect on January 12, 2022. By November 2022, a detailed feasibility study had been completed; DoE had issued a site clearance certificate; land development had been completed; and the project had achieved a 5% physical progress (completion) rate. The project’s originally expected completion date was December 2026.