Meghnaghat II Power Plant

active

On November 2010, Summit Power Limited (SPL) a Bangladeshi Independent Power Producer, was signed a Build Own and Operate agreement with Bangladesh Power Development Board (BPDB) for the construction and operation for a 22 years term of a 450 MW, combined cycle (Natural gas) power plant at Meghnaghat. The contractors was a joint venture between Summit Industrial (Bangladesh, 50 %) and Mercantile Corporation Ltd (China, 50%). The plant will be completed in two phases, the first phase up to 300MW, and a then it will be upgrade of 150MW capacity installation. Under the BOO agreement, SPL was to supply 450 MW of energy to BPDB for a term of 22 years. The remainder of the energy was to be sold to the public. Following a competitive bidding process, SPL was declared the lowest bidder to set up a 450 MW combined cycle power plant at Meghnaghat. The total project cost was 300 US millions. according to BPDB publications The project reached financial closure in January 2012, few months after the signing of the loan agreement. 60 % (180 US millions) of the loan were arranged from capital market by issuing zero coupon bonds under the assistance of Janata Bank Limited and Industrial and Infrastructure Development Finance Company. On December 28, 2012, MIGA issued a guarantee of $221.4 million to Hong Kong Shanghai Banking Corporation (HSBC) of the United Kingdom to cover its non-shareholder loan to Ashuganj Power Station Company Ltd. On March 8, 2013, MIGA issued additional coverage of $30 million covering a swap arrangement to hedge against long-term interest rate risk. MIGA’s guarantees are for a period of up to 13.5 years against the risk of non-honoring of sovereign financial obligations. The Ministry of Finance of Bangladesh has provided an unconditional sovereign guarantee covering payment obligations of APSCL under the debt financing and the swap.