Narrative
Full Description
Project narrative
On October 14, 2016, the Export-Import Bank of China and Bangladesh-China Power Company (Pvt) Limited (BCPCL) signed a $1.984 billion financial framework agreement for Phase 1 of the Payra 1320 MW Thermal Power Plant Project. Then, China Eximbank and BCPCL signed the project financing deal on May 3, 2018 (as captured via Record ID#52748). BCPCL is a 50:50 joint venture between Bangladeshi state-owned company North-West Power Generation Company Limited (NWPGCL) and Chinese state-owned company China National Machinery Import & Export Corporation (CMC) that was established on October 1, 2014 to implement the Payra 1320 MW Thermal Power Plant Project. CMC provided equity through the joint venture for the project (as captured via Record ID#56005). Phase 1 of the Payra 1320MW Thermal Power Plant Project was completed on March 21, 2022 (see Record ID#52748). Then, in 2019, China Eximbank appears to have agreed in principle to provide a loan for Phase 2 of the Payra 1320MW Thermal Power Plant Project. As of the end of 2020, negotiations over the China Eximbank loan to BCPCL for Phase 2 were ongoing, but the Standard Committee on Non-Concessional Loan (SCNCL) of the Government of Bangladesh had approved the proposed terms and conditions of the loan through the Economic Relations Division of Bangladesh's Ministry of Finance. At that time, it was expected that China Eximbank would finance 75% of the total cost ($2.06 billion) of Phase 2. The $1.545 billion proposed loan was expected have a maturity of 15 years with a grace period of 4 years. The finance ministry agreed to provide a government (sovereign) guarantee against 50 percent of the face (nominal) value of the loan contracted by BCPCL. However, as of April 2022, there was no indication that the loan agreement had been signed. The purpose of Phase 2 is to construct two additional units with a capacity of 660 MW each (for a total capacity of 1320 MW) at the Payra Thermal Power Plant. The units are expected to rely on imported coal, use a 400 kV GIS substation for power evacuation and cooling tower for closed circulation of water, and featured ultra-supercritical boilers (27 Mpa/600/610c). The plant is located at the same project site as Phase 1, in Dhankhali, Kalapara within Patuakhali District. BCPCL released the invitation for bids for project implementation on June 6, 2018. A consortium consisting of China Energy Engineering Group Northeast No. 1 Electric Power Construction (NEPC) and China National Energy Engineering & Construction Co., Ltd. (CECC) won the $1.44 billion engineering, procurement, and construction (EPC) contract. The EPC contract was signed on May 16, 2019. A draft Environmental Impact Assessment (EIA) for Phase II was submitted several months earlier (in January 2019). The EIA was approved on October 9, 2019. Then, on February 6, 2020, the EPC contractor declared force majeure, citing the Covid-19 pandemic. Phase 2 construction activities commenced in January 2021. The Power Purchase Agreement and Implementation Agreement for Phase 2 was also signed on January 7, 2021. By the end of 2022, Phase 2 had only achieved a 22% completion rate. BCPCL's 2022 Annual Report stated that 'the project financing for Phase 2 has been slightly delayed due to recent global concerns over coal based power plant, but now the financing of the project is at a promising stage.' Then, in May 2024, BCPCL sent a delegation to Beijing to (a) negotiate a rescheduling of the China Eximbank loan for the First Phase of the 1320MW Payra Coal-Fired Thermal Power Plant Project, and (b) accelerate 'financial closing' for Phase 2 of the 1320MW Payra Coal-Fired Thermal Power Plant Project. As of 2018, the expected commercial operation date (COD) for the third (660MW) power generation unit was December 2021, and the expected COD for the fourth (660MW) power generation unit was June 2022. These projections changed several times. In 2019, the expected COD for the third unit was June 2022, and the expected COD for the fourth unit was December 2022. By 2020, the expected COD for the third unit was November 2023, and the expected COD for the fourth unit was December 2023. In 2022, the expected COD for the third unit was May 2024 and the expected COD for the fourth was June 2024.
Staff comments
1. The Chinese project title is 博杜阿卡利2×660MW超超临界燃煤电站项目. 2. The face (nominal) value of the loan was estimated by calculating 75% of the $2.06 billion total project cost. 3. This project should not be confused with any of the joint-development agreements for the Payra 3600 MW LNG-to-Power Project signed between NWPGCL and Siemens (Germany). 4. AidData has selected 2019 as the commitment year, but has checked the commitment_year_estimated field because the first mention of a potential China Eximbank loan comes in "Bangladesh-China Power Company (Pvt) Limited Annual Report 2019." 5. AidData has deduced that project implementation began in 2019 because "Bangladesh-China Power Company (Pvt) Limited Annual Report 2019" refers to the project in the present tense (as opposed to the 2018 Annual Report). The exact date of the commencement of implementation is unclear, although it is likely it occurred after the signing of the EPC contract on May 16, 2019. 6. There are three different power plants being constructed in the Patuakhali District of Bangladesh. Each one of these projects is funded partially by joint ventures between Chinese and Bangladeshi state-owned enterprises and partially by China Eximbank. Two of the coal-fired plants will contain two 660 MW generators, with the third project containing two phases, both of which have two 660 MW generators. The joint venture partners clarified that these plants are near each other, but distinct plants within the region-wide electrification campaign. These projects include: (a) Patuakhali 1320MW (2 x 660MW) Ultra Supercritical Coal Based Thermal Power Plant Project (phase 2) (BCPCL): Bangladesh’s Northwest Power Generation Company Ltd. and China’s China National Machinery Import & Export Corporation established the Bangladesh-China Power Company Ltd. (BCPCL) joint venture in October 2014. The joint venture is captured in Record ID#56005. The China Eximbank funding for Phase 1 (units 1 and 2) is captured in Record ID#52748. The China Eximbank funding for Phase 2 is captured via Record ID#38245. (b) Patuakhali 1320MW (2 x 660MW) Coal-Fired Power Plant (Ashuganj/ APSCL): Bangladesh’s Ashuganj Power Station Company Ltd. (APSCL) and China’s China Energy Engineering Corporation Ltd. (CEEC) established a joint venture in July 2017 to build a power plant in Patuakhali. The joint venture is captured in Record ID#56547. CEEC planned to solicit a loan from the China Eximbank for the debt portion of the project. (c) Patuakhali 1320MW (2 x 660MW) MW Coal Fired Thermal Power Plant (RPCL): Bangladesh’s Rural Power Company Ltd. (RPCL) and China’s NORINCO established a joint venture in November 2017. The joint venture is captured via Record ID#56357. The China Eximbank funding is captured in Record ID#56402.