Infrastructure & PPPs in Bangladesh - Q12021 Update
BANGLADESH is set to see major infrastructure projects being developed under the PPP model, most notably in transport sector (roads, bridges, ports and airports). With a planned project pipeline of around 80 infrastructure projects to be developed in the country, Bangladesh presents private sector participation opportunity (either via PPP model or via G2G negotiations) in multiple sectors like transportation, tourism, healthcare and housing.
Read more about key developments in Infrastructure and PPPs in Q12021 in Bangladesh in our latest insight.
Jan - 21
TURKEY EVALUATING PPP OPPORTUNITIES IN BANGLADESH
Turkish companies are assessing investment opportunities in Bangladesh’s health, energy, and other infrastructure sectors. Companies are keen to invest in liquefied petroleum and a modern hospital, among other projects, in the public-private partnership (PPP) model.
The companies are also interested in signing a Memorandum of Understanding between Bangladesh’s PPP Authority, adding to it there are many contracting companies in Turkey that are keen to work in Bangladesh. Bangladesh has a pipeline of 79 projects in the PPP model, of which six projects have started construction work.
Bangladesh has a pipeline of 79 projects in the PPP model, of which six projects have started construction work, as per publicly available information from Bangladesh PPP Authority, with the projects are across sectors such as transportation, tourism, healthcare and housing.
Feb - 21
NORINCO GETS USD 1.78 BN LOAN FOR COAL-FIRED PROJECT
Chinese state-owned engineering company Norinco International secured a USD 1.78 BN syndicated loan from a consortium led by China Eximbank for a coal-fired power plant in Bangladesh.
The 15-year syndicated loan carries an interest rate of 259 basis points above the six-month London Interbank Offered Rate (LIBOR). The project loan's 15-year credit guarantee will be split equally between Norinco and the Finance Ministry of Bangladesh. The 1.32 GW Patuakhali Ultra-Supercritical Coal-fired Power Plant's special purpose vehicle is a 50:50 joint venture between Bangladeshi state-owned Rural Power Company and Norinco.
The power plant, with a total investment of USD 2.5 BN, is 30%-backed by equity and 70% by debt. It is located in south-central Bangladesh in Barisal division, adjacent to the Bay of Bengal and 210km from the capital city of Dhaka.
The build-own-operate project is currently in the construction stage, with a target commissioning date of 2023. It has a concession period of 25 years, with an estimated post-tax internal rate of return of 10.05% and a payback period of 9.3 years.
JAPANESE COMPANIES TO DEVELOP USD 8.3 BN BANGLADESH TRANSPORTATION PROJECTS
The Bangladeshi and Japanese governments have agreed to develop USD 8.3 BN of transport infrastructure projects in public-private partnerships. Japanese private sector companies will be invited to participate in all the projects.
The projects will come under Bangladesh’s government-to-government PPP laws, where deals are first struck by the authorities and then offered to private companies. The firms have to submit presentations, and the governments choose the investor. There is no bidding process.
The projects are:
· Kamalapur multimodal transport hub.
· Chattogram-Cox's Bazaar expressway.
· Dhaka Outer Ring Road.
· Mass Rapid Transit Line 2; and
· Biman Bandar multimodal transport hub.
The countries also discussed two other projects - upgrading the Nabinagar-Manikgong-Paturia Road to an expressway - and a concession for the Hazrat Shahjalal International Airport near Dhaka and development of its surrounding area. The expressway project will be added to the pipeline on the premise that Japanese companies will evaluate this for development in a PPP.
Mar - 21
POWERCHINA COAL PROJECT TO SELL POWER TO BANGLADESH UTILITY
Transport-to-renewables company PowerChina is set to sell power from the 307 MW Barisal coal power plant in Bangladesh to the country's state-owned utility. The Chinese company signed the power purchase agreement with Bangladesh's Ministry of Power, Energy and Mineral Resources and other government agencies for the USD 558 MN project.
The project will sell electricity to the country's state grid at a base tariff of BDT 6.77 (USD 0.08)/kwh under the 25-year PPA. It will likely be 70%-financed by bank loans and the remaining through equity. The Barisal Coal Power Plant is jointly owned by ISO Tech Electrification Company Limited (ITECL) - a subsidiary of local firm ISO Tech Group - and PowerChina, with the project company formed in 2017. The target commissioning deadline of the build-own-operate project is January 2022, with a construction period of 45 months.
List of Key Transactions - Bangladesh Q1-2021
Source: Inframation, YOG INFRA analysis
List of Upcoming PPP Projects - Bangladesh
Source: Inframation, YOG INFRA analysis
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