Bank of China contributes to $1.77 billion syndicated loan for 1320 (2 x 600) MW Patuakhali Coal-Fired Thermal Power Plant Construction Project (Linked to Record ID#56005, #52748, #38245, #56357, #56547, and #56402)

Project narrative

On December 24, 2020, China Eximbank and Bank of China signed a $1,777,538,000 syndicated loan (facility) agreement with RPCL-NORINCO Intl. Power Ltd. (RNPL) — a special purpose vehicle and joint venture of Rural Power Company Ltd. (RPCL) [50% ownership take] and NORINCO International Cooperation Limited [50% ownership stake] that was legally incorporated in December 2017 — for the 1320 (2 x 600) MW Patuakhali Coal-Fired Thermal Power Plant Construction Project. The Sinosure-backed loan carries an interest rate of 6-month LIBOR plus a 2.59% margin, a 4-year grace period, a 15-year maturity (final maturity date: September 27, 2036), a 0.5% commitment fee, and a 0.9% arrangement (management) fee. The borrower is responsible for repaying the loan in 22, equal, consecutive, semi-annual principal installments. The Ministry of Finance of Bangladesh issued a sovereign guarantee in support of 50% of the face value of the loan ($888,769,000) on March 8, 2021. NORINCO issued a repayment guarantee for the remaining 50% of the face value of the loan. RPCL and NORINCO International Cooperation Limited also pledged their equity stakes in RPCL-NORINCO Intl. Power Ltd. (RNPL) — as sources of collateral. The borrower was expected to use the proceeds of the loan to partially finance an EPC contract that it signed with a consortium consisting of Tianjin Electric Power Construction Co. Ltd., China Huadian Engineering Co. Ltd, and China Wanbao Engineering Corporation (TEPC-CHEC-CWEC) on March 6, 2019. The total cost of the project is approximately $2.54 billion and it is being financed according to a 70:30 debt-to-equity ratio. The first loan disbursement took place on September 26, 2021. Loan disbursements amounted to $1,000,693,531.64 as of June 30, 2023. The purpose of the project is to construct a thermal power plant with two 660MW coal-fired units (‘Unit 1’ and ‘Unit 2’) in Kalapara within Patuakhali District. The project site is located on the western bank of the Rabnabad River, in the vicinity of the Payra Port, 210km away from Dhaka and 160km away from Chittagong. Each 660MW power generation unit will be equipped with an ultra-supercritical boiler along with a high-efficiency steam turbine and a generator. The plant will be equipped with low nitrogen oxide (Nox) burner, electrostatic precipitators (ESP), and a flue gas desulphurisation (FGD) system to control emissions. Other components of the project will include a closed-cycle cooling system, 275m-high flue stacks, and a 400kV gas-insulated substation (GIS). The plant will source water from the Rabnabad River for cooling. The Patuakhali power plant is estimated to consume 4.48 million tonnes (Mt) of coal a year, which will be imported from Indonesia and Australia. Other infrastructure for the Patuakhali power project will include a coal jetty, coal handling and storage facilities, and access roads for transporting material and equipment. The project site will also house a water treatment facility and a warehouse building. The construction works are being facilitated by a concrete batching plant and a temporary project office. The electricity generated by the Patuakhali coal-fired power plant will be evacuated into the national grid of Bangladesh through a 400kV power transmission line. The power plant will process 12273 tons of coal per day and sell power to the Bangladesh Power Development Board (BPDB). Bangladesh Power Development Board (BPBD) will offtake the entire electricity output of the plant, under a power purchase agreement (PPA) that it signed with RNPL in February 2019. The power plant is expected to displace 350 families, so RPCL plans to set up a village with schools, shops, community centers, and mosques to accommodate them. TEPC-CHEC-CWEC is the EPC contractor responsible for project implementation. Central Southern China Electric Power Design Institute (CSEPDI) of China Power Engineering Consulting Group Corporation was also involved in the design of the project. RNPL issued a notice to proceed (NTP) to the EPC contractor (TEPC-CHEC-CWEC) on August 31, 2019. Construction began on September 1, 2019. As of October 2022, the project had achieved a 61.19% completion rate. The power plant’s first 660MW unit (Unit 1) was originally expected to come online by February 2023, followed by the commissioning of the second 660MW unit (Unit 2) in August 2023. In April 2025, both units were connected to the grid and by the end of June 2025 Phase II's unit was operating.