China Eximbank provides RMB 2.63 billion government concessional loan for Expansion and Strengthening of Power System Network under DPDC Area Project (Linked to Project ID#52758)

On June 1, 2014, Tebian Electric Apparatus (TBEA) Co., Ltd. and Dhaka Power Distribution Company (DPDC) signed a Memorandum of Understanding (MOU) regarding a potential government-to-government concessional loan for the expansion and strengthening of the power system network in the DPDC area. The Government of Bangladesh’s Executive Committee of the National Economic Council then approved the project on December 6, 2016. On August 11, 2017, the Chinese Government reportedly agreed in principle to finance the project. Then, on July 4, 2019, China Eximbank and the Government of Bangladesh signed an RMB 2,630,000,000 ($381,160,000) government concessional loan (GCL) agreement [CHINA EXIMBANK GCL NO. (2018) 30 TOTAL NO. (672)] and a $1,021,775,000 preferential buyer’s credit (PBC) agreement [CHINA EXIMBANK PBC NO. (2018) 24 TOTAL NO. (481)] for the Expansion and Strengthening of Power System Network under DPDC Area Project. The GCL carries an interest rate of 2%, a maturity of 20 years, a grace period of 5 years, and a commitment fee (service charge) of 0.2%. The PBC carries an interest rate of 3%, a maturity of 20 years, a grace period of 5 years, and a commitment fee (service charge) of 0.2%. Project ID#69151 captures the GCL and Project ID#52758 captures the PBC. The proceeds of the PBC and the GCL are to be used by the borrower to finance a $1,657,510,800 commercial contract between TBEA Co., Ltd. and DPDC, which was signed on October 14, 2016. According to the Government of Bangladesh’s Economic Relations Division (ERD), the GCL had achieved a disbursement rate of 55.2% (RMB 1,452,037,000 out of RMB 2,630,000,000) as of June 30, 2020 and 59.5% (RMB 1,565,767,000 out of RMB 2,630,000,000) as of June 30, 2021, but the PBC had still not disbursed as of June 30, 2021. The borrower had not made any repayments under the GCL or PBC as of June 30, 2021. The project involves the construction of 14 132/33 KV substations, 26 33/11 KV substations, automation systems, mechanized warehouses, 653 km underground cable of 132 kv and 700 km 33 KV distribution lines. The substations, which include the 33/11 KV substation at Bangladesh University of Engineering and Technology (BUET) among others, will be built in Dhaka and Narayanganj. The proceeds of the loan will also be used to construct a twin tower in the Hatirpool area and a 20-story building in Hatirjheel for the state-owned Dhaka Power Distribution Company Limited (DPDC). Tebian Electric Apparatus (TBEA) Co. Ltd is the general EPC contractor responsible for implementation. However, China National Technical Import & Export Corporation (CNTIC) and Sichuan Electric Power Transmission and Transformation Construction Ltd. (SPTTC) are also involved in the project (most likely as subcontractors). The COVID-19 pandemic led to major delays (as Chinese engineers and workers could not travel from China to the project site) and project implementation did not formally commence until June 19, 2021. Then, on October 31, 2021, a 33/11 KV substation at Bangladesh University of Engineering and Technology (BUET) was officially inaugurated and put into use. Two months later, in January 2022, the Dhaka Power Distribution Company (DPDC) opened its first-ever underground switchgear load connection point — or ring main unit (RMU) — at the Bangladesh Agriculture Research Council (Barc). An RMU is a factory-assembled, metal-enclosed set of switchgear used at the load connection points in an electrical power distribution system. The RMUs being installed through the project will reportedly be used to supply electricity to the nearby areas through 11kv underground cables from the 33/11kv substation at Monipuripara. Existing overhead electric cables from Bangabhaban to Jahangir Gate and from Gabtoli to Azimpur will also reportedly be taken underground through the project. In the first phase of the project, 22 RMUs, 19 LTDB and 4 Kiosk transporters are being set up in the Jahangir Gate-Faramgate area to take the overhead cables underground. According to Bikash Dewan, Managing Director of the DPDC, upon completion, the project will ensure more uninterrupted power supply to the installations on both sides of the main road from Jahangir Gate to Farmgate.

Additional details

1. The Government of Bangladesh loan identification number for the GCL is L1120190704A. The Government of Bangladesh loan identification number for the PBC is B1120190704A. 2. The Chinese project title is 孟加拉达卡地区电网系统扩容和升级项目132kV高压电力电缆 or 孟加拉达卡地区电网系统扩容和升级项目. 3. In the China’s Overseas Development Finance Dataset that Boston University's Global Development Policy Center published in December 2020, one loan recorded for this project: a $1.4 billion China Eximbank loan. AidData two separate China Eximbank loans for this project, as they as recorded by the Economic Relations Division (ERD) of the Ministry of Finance of Bangladesh: an RMB 2.63 billion government concessional loan and a $1.02 billion preferential buyer’s credit. 4. The DPDC operates mainly in central, west and old part of Dhaka city and also most of Narayanganj city.

Number of official sources

27

Number of total sources

57