Infrastructure in Bangladesh - H12020 Update
Updated: Aug 17, 2020
FINANCIAL CLOSE 745 MW MEGHNAGHAT GAS POWER PROJECT
Japan's JERA and India's Reliance Power yesterday signed financing documents for the 745 MW Meghnaghat gas fired IPP in Bangladesh.
The Japan Bank for International Cooperation (JBIC) said it will lend USD 265m into the USD 642m financing. The Asian Development Bank (ADB) will lend USD 200m - comprising of USD 100m from the bank itself and another USD 100m from the ADB-administered leading Asia’s Private Infrastructure Fund (LEAP). Mizuho Bank, Sumitomo Mitsui Banking Corporation, MUFG Bank, and Société Générale are also participating in the project financing. Nippon Export and Investment Insurance (NEXI) will insure part of their loans.
In Sep-19, JERA took a 49% stake in Meghnaghat from Reliance Power.
CHITTAGONG PORT EXPANSION PLAN
The Chittagong Port Authority in Bangladesh is planning to take on a consultant to prepare a master plan to expand capacity. The new facilities – comprising of terminals and jetties - will collectively be called the Bay Terminal. The plan will supersede an existing proposal that was prepared a few years ago.
At over 3 million twenty foot equivalent units (TEU) and registering a 10-11% on-year growth in container traffic, Chittagong Port – which handles about 90% of the country’s seaborne trade – is already managing more cargo than its designed annual capacity of 1.7 million TEUs.
BANGLADESH ALLOCATES USD 4BN FOR PPPS
Bangladesh has increased allocations for public-private partnership (PPP) projects and will amend legislation to encourage private investments, the country's Finance Minister said in his budget speech on 11-Jun-20.
The government proposes to spend BDT 366bn (USD 4bn) on PPP projects for the year through June 2021, or 6.45% of the total budget, compared to 6% for the year through June 2020. The national budget outlay for 2021 is BDT 5.68trn compared to BDT 5trn for 2020.
Steps have also been taken to amend the Bangladesh Public-Private Partnership Act, 2015, to encourage private sector participation. The government will additionally focus on PPP initiatives in certain infrastructure segments, such as warehousing, to provide a fillip to export-oriented industries.
BANGLADESH SOLAR TENDER DEFERRED
Bangladesh's competitive tender for a 50 MW solar power project in the Kushtia district has been postponed, according to International Finance Corporation (IFC), which is advising on the tender. Spanish engineering company TYPSA Group was retained as technical advisor for the project in Jan-20, but due diligence process on the project was held up by coronavirus-related travel restrictions.
The tender is designed as a pilot programme to encourage developers and engineering, procurement and construction (EPC) contractors to participate in the country's renewables sector. Bangladesh plans to increase the share of renewable sources in its energy mix from 3% currently to 20% by 2030. The government is looking to install about 600MW of rooftop solar projects, half of which is scheduled to be installed by 2023.
ADB SIGNS NON-SOVEREIGN LOAN TO BANGLADESH SOLAR
Asian Development Bank has signed a nearly $20 million financing package with the independent power producer of a 35MW solar PV park in central Bangladesh – one of the first private sector solar projects in the country to be financed by multilateral institutions. Spectra Solar Park (SSPL) is the special purpose vehicle of the 35MW Shibaloy solar project in Manikganj – a grid-connected power plant about 85km west of Dhaka.
BANGLADESH WATER PPP HALTED DUE TO VIRUS
Shanghai-based China United Water Corporation expects its BDT 6bn (USD 72m) water PPP in Bangladesh to be severely impacted by the coronavirus pandemic. The water services firm, along with local partner Delcot Water, signed the PPP contract in Nov-19 with the Bangladeshi government to build 340,000 tonnes/day water distribution and supply facilities at the Purbachal New Town Project under the BOT method.
It will benefit from project payments from the Capital Development Authority, an agency under Bangladesh’s Ministry of Housing and Public Works. Construction will take four years with a target commissioning date of 2023. The operation period is 15 years.
SUMMIT POWER REFINANCES GAZIPUR-II POWER PLANT
Summit Power International has refinanced USD 140m of debt linked to the 300 MW Gazipur II oil-fired power project in Bangladesh. Temasek-backed infrastructure financier Clifford Capital provided a senior secured term loan and Japan's Sumitomo Mitsui Banking Corporation lent a floating-rate term loan. Clifford Capital acted as joint coordinator for the financing.
Gazipur II was commissioned in May 2018. It sells power to Bangladesh Power Development Board (BPDB) under a 15-year power purchase agreement (PPA).
RAFFLES INFRASTRUCTURE IN ALLIANCE TO BUILD BANGLADESH TOWNSHIP IN DHAKA
Singapore-listed Raffles Infrastructure will tie up with a Bangladeshi trust fund to develop a USD 800m township project in Dhaka. The project involves the design, financing, construction, marketing, operation, and maintenance of 50 acres of land expected to hold more than 5,000 residential units. The project is located west of Dhaka’s Hazrat Shahjalal International Airport, in Baunia ward.
Raffles was selected by the Army Welfare Trust of the People’s Republic of Bangladesh, a welfare trust owned by the country’s Army, after a bidding process.
AIIB APPROVES BANGLADESH TRANSPORT LOAN
Asian Infrastructure Investment Bank (AIIB) has approved a loan to fund a $585.3 million road upgrade as part of a 286km national highway in Bangladesh.
The Roads and Highways Department is the implementing agency of the Sylhet-Tamabil road upgrade project. It will include the construction, consulting, O&E and project management of the roughly 58km road section upgrade between Sylhet, Bangladesh’s fifth largest city by population, and Tamabil, a north-eastern city near the Indian border.
CHINA ENERGY SIGNS USD 2BN BANGLADESH NEW TOWN PROJECT
A unit of China Energy Engineering Corporation has agreed to build and finance a USD 2bn integrated urban infrastructure project in Bangladesh.
China Gezhouba Group International Engineering signed the agreement last week with the Bangladesh Development Company to help build a new district - called South Town, Keraniganj - in the capital city of Dhaka. The town of Keraniganj stands on the southwest side of Dhaka, on the banks of the Buriganga river.
The state-owned company will help raise funds from Chinese banks and begin construction once the project reaches financial close and it receives a down payment. The company will also look to secure a credit guarantee from China's Sinosure.
BANGLADESH CONGLOMERATE SIGNS HEALTHCARE PPP
United Group signed a PPP concession agreement with Bangladesh Railway (BR) to develop a Tk3.98 billion (USD 47m) hospital and medical college. The design-build-finance-operate project involves a 500-bed multi-speciality hospital and 100-seat medical college on six acres of BR-owned property in Chattogram. The facilities will be next to an operational Railway Hospital in the port city.
The 50-year concession also involves the development of a paramedical college or nursing institute.
BR will lease the land, while United will transfer the facilities to BR after the concession finishes.
GOVERNMENT APPROVES BANGLADESH’S FIRST DEEP-SEA PORT
Bangladesh's Executive Committee of the National Economic Council (ECNEC), chaired by Prime Minister Sheikh Hasina, has approved a Tk177.77 billion (USD 2.09bn) deep-sea port. The Matarbari Deep-Sea Port project – implemented by Chattogram Port Authority (CPA) and the Ministry of Road Transport and Bridges’ Roads and Highways Division – will involve the construction of a 300m multipurpose, bulk cargo terminal and 460m container terminal. Specifications show that it will be possible for ships with 8,000 TEU containers to anchor, thanks to the port channel’s 16m draft, which will be deepened to 18m. The project also includes building a 26.7km link road.
POWERCHINA TO BUILD TWO BANGLADESH POWER PROJECTS
PowerChina is collaborating with a Bangladeshi firm to finance and build two heavy fuel oil (HFO) power stations in Bangladesh for a combined USD 210m. PowerChina Hubei Engineering signed an EPC plus financing agreement with PowerPac, which is controlled by banking-to-port conglomerate Sikder Group, for the 100 MW Khulna HFO-based Power Plant. The Chinese company will also provide EPC and financing for the 160 MW Keraniganj Dual Fuel (HFO/Gas) Power Plant.
Both plants will be in a new industrial zone of Mongla district (PowerPac Economic Zone Mongla (PEZM)) in the southern coastal division of Khulna adjacent to the port of Mongla.
BANGLADESH AWARDS 55 MW SOLAR
The Bangladesh Power Development Board (BPDB) has awarded a 55MW grid-tied solar project to a Metito-led consortium, following a nearly six-month assessment of the lowest bidder’s proposal.
The consortium, with members as Metito Utilities (UAE), Jinko Power (China) and Aljomaih Energy and Water (Saudi Arabia), will develop the Rangunia solar PV plant in Chattogram under a 20-year build-own-operate (BOO) contract. BPDB, the offtaker, has mitigated land acquisition risk by leasing roughly 190 acres of land it owns near Power Grid Company of Bangladesh's (PGCB) Chandraghona 132/33kV grid substation.
BANGLADESH ROADS DEPARTMENT SEEKS CONSULTANTS TO DESIGN TOLL SYSTEM
Bangladesh’s Roads and Highways Department is seeking consultants to design, develop and commission a unified toll management system as it prepares to offer road projects for bidding. At present, there are four private firms operating about nine projects that are using their own individual toll collection systems.
The consulting assignment includes formulation of a national toll governance framework, setting a timeline for all toll systems in the country to comply with a uniform method and their supervision to ensure compliance.
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