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Infrastructure & PPPs in Bangladesh - Q3 2021 Update

BANGLADESH is actively pursuing development of power generation capacity in the country. With the recent notification to scrap 10 coal power plants earlier in the year, the country is now working with development finance institutions (DFIs) to significantly promote renewable energy so as to meet its increasing power needs.

Read more about key developments in Infrastructure and PPPs in Q3 2021 in Bangladesh in our latest insight.

 

July 2021

CHINA'S CHINT ENERGY LAUNCHES BANGLADESH SOLAR UNIT

Chinese renewables firm Chint Energy has launched a solar development subsidiary in Bangladesh. The private sector solar company will focus on commercial and industrial distributed solar, including floating projects.

Chint Energy will be involved in the design, construction, financing, operations as well as maintenance of the projects. The company had a project pipeline of 500 MW in Bangladesh as of the end of the first half of 2021. The unit has been established due to strong solar radiation levels in Bangladesh.

Chint Energy is currently partnering with Bangladeshi conglomerate PRAN-RFL Group, whose business spans food, electronics, and engineering. The Chint unit will leverage PRAN-RFL’s existing business resources for its distributed solar pipeline. The rooftops of PRAN-RFL’s plants have a total area of 720,000 sqm and the company has a land bank that ranks fifth by area in the South Asian country.


August 2021

BANGLADESH SEEKS ADVISOR FOR POWER SUPPLY UPGRADE PROJECT

Bangladesh has invited expressions of interest from international advisory firms for a USD 1Bn power supply improvement project. The winner will have to help attract investments to the green building sector, achieve a target for energy efficiency in the country and popularize energy efficiency and conservation in buildings.

The firm will be paid USD 373,800 for the six-month contract. The role is part of a project, backed by the Manila-based Asian Development Bank (ADB), to upgrade electricity transmission and distribution systems in the country and build a 174km transmission line linking the capital city of Dhaka to the southwest.

The ADB will lend USD 616Mn for the project while the remaining amount will be financed by the Bangladesh government.

The country plans to generate about 40% of its electricity from renewable energy by 2041 from only 3% at the end of 2020, as well as increase the use of liquefied natural gas in the power generation mix to meet its needs.


SHAPOORJI PALLONJI SECURES REFINANCING FOR BANGLADESH GAS POWER PLANT

Indian conglomerate Shapoorji Pallonji's infrastructure unit has secured refinancing for a 225 MW gas-fired power plant in Bangladesh from a group of three lenders. The lead arranger is Sumitomo Mitsui Banking Corporation (SMBC), and the others in the group are Singapore-based DBS Bank and Société Générale .

The power plant is located in Bhola, an island in the Barisal district of Bangladesh. It was estimated to cost USD 270Mn at the time of its construction in 2017 by Shapoorji through a special purpose vehicle called Nutan Bidyut. The plant started operations in 2020 and sells power to state-owned Bangladesh Power Development Board under a 22-year power purchase agreement.

Beijing-headquartered Asian Infrastructure Investment Bank and Jeddah-based Islamic Development Bank provided a combined loan of USD 120Mn to the project in 2018. The plant is dual-fuel, which means that it uses gas as its primary source of fuel and high-speed diesel as back-up. It sources its fuel from Sundarban Gas Company and Bangladesh Petroleum Corporation.


September 2021

BANGLADESH SEEKS ADVISOR FOR STUDY ON OFFSHORE WIND PROJECTS

The Asian Development Bank (ADB) has invited expressions of interest (EoIs) from international firms to carry out a feasibility study for a project to develop offshore wind farms in Bangladesh. The selected company will assess the potential of wind energy in the Bay of Bengal and identify potential project locations. It will also prepare a plan to attract public and private sector investments.

The firm will conduct a pre-feasibility and a detailed feasibility study - in two phases - to help Bangladesh increase the share of wind energy in its total power generation mix.

Bangladesh has 26 blocks in deep and shallow seas, covering more than 118,813 sq.km of water, that can be harnessed for energy. Beside oil and gas exploration, winds off the coast of Bay of Bengal hold the best source of energy.


BANGLADESH AND SAUDI TO SIGN PPP AGREEMENT

The governments of Saudi Arabia and Bangladesh will soon sign an agreement on public-private partnerships. Saudi Arabia is keen to invest in Bangladesh's infrastructure and communication system development.

Bangladesh’s PPP policy with international government partnerships was formed in 2017. The legislation provides the framework for delivering PPP projects whereby the implementation is carried out with the support of other governments, executed through their state-owned or private sector entities.

Financing for these projects is arranged either from the state-owned or private sector company or a combination of both. The Bangladesh government reserves the right to take an equity stake or provide debt financing to the project company.

 

List of Key Transactions - Bangladesh Q3-2021

Source: Inframation, YOG INFRA analysis

 

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