Bhola-2 220MW Combined Cycle Power Plant
This summary covers a proposed investment by Actis Ambergen 2 Limited and Actis Energy 5B LP of Mauritius and the United Kingdom respectively, and financing by Bank of China Limited, Singapore Branch of the People’s Republic of China, DBS Bank Ltd. of Singapore, ING Bank N.V., Singapore Branch of the Netherlands, Mizuho Bank, Ltd. of Japan, SG Capital Finance (Hong Kong) Limited of Hong Kong SAR, and Sumitomo Mitsui Banking Corporation, Singapore Branch of Japan (together, the Guarantee Holders) for the acquisition and refinancing of the project enterprise incorporated in Bangladesh, Nutan Bidyut (Bangladesh) Ltd. The project involves the investment and refinancing of an IPP, Bhola-2 220MW Combined Cycle Power Plant on a build, own and operate basis under a long-term power purchase agreement with the Bangladesh Power Development Board.
The Guarantee Holders have applied for MIGA guarantees covering up to US$457.9 million in investments of equity and shareholder loans, and non-shareholder loans of principal and associated future interests for the project. The guarantees will have a term of up to 20 years, and provide coverage against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract.
MIGA’s support for the project is expected to yield positive development benefits by mobilizing a foreign sponsor with extensive operational management expertise in the power sector and international commercial lenders to replace existing DFI lenders, thereby improving the financial stability of the project during a period of waning FDI activity exacerbated by the COVID-19 global pandemic. The acquisition of a power asset that recently achieved COD will not only ensure the availability of power in Bangladesh, but will also highlight a business model that has potential for replication. The project is aligned with MIGA’s strategy of greater engagement in IDA countries and is consistent with the World Bank’s focus on the pillars of growth and competitiveness, social inclusion, and climate and environmental management presented in Bangladesh’s Country Partnership Framework FY16-FY20. MIGA’s support for the project is aligned with the Government of Bangladesh’s long-term development strategy of ensuring energy security through reliable access to reasonably priced energy.