AIIB okays $60m for Bangladesh’s power project

The Beijing-based Asian Infrastructure Investment Bank is set to provide a $60 million loan for a power project in Bangladesh to take its exposure in the country to $285 million, which is 6.6 percent of its total portfolio.

The amount will go towards building a 220-megawatt combined cycle power plant in Bhola, the total cost of which would be $271 million. Islamic Development Bank and local Infrastructure Development Company will provide the remaining funds.

The project will be developed by India’s Shapoorji Pallonji Infrastructure Capital Company Private Limited through Nutan Bidyut (Bangladesh) Limited, a special-purpose vehicle incorporated in Bangladesh for this.

The loan will carry an interest rate of 2.4-2.5 percent, which is higher than those offered by Bangladesh’s regular multilateral lenders such as the World Bank and the Asian Development Bank.

“AIIB does not provide concessional loans. We finance those projects that are commercially viable,” said Laurel Ostfield, head of communications and development of AIIB, at a media briefing held yesterday at the capital’s Lakeshore Hotel. The bank had earlier given loans amounting to $225 million to two power projects. AIIB is investing in the assignment as it will be one of the most efficient electricity flora delivering low-priced electricity in Bangladesh, stated its Director General Dong-ik Lee. Bangladesh’s acute strength scarcity is impacting its economic growth and its effort to minimize poverty, said DJ Pandian, AIIB’s vice-president and chief funding officer, in a statement. “This investment will assist Bangladesh enlarge its energy supply to aid industries that are fundamental to growth,” he added. Ostfield additionally touched upon Bangladesh’s tasks that are in the pipeline and AIIB’s focus place and its expertise. AIIB is considering five extra tasks really worth $885 million that Bangladesh has approached it for. Yuanjiang Sun, principal communications officer of AIIB also current at the briefing.