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Bangladesh takes USD 1.5 billion loans to install five power plants
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Saturday, 02 Mar 2013
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The Financial Express reported that the government has finally decided to borrow hard term loans worth nearly USD 1.5 billion from export credit agencies for setting up 5 big power plants.

The Power Division officials said that they have already selected bidders for setting up the plants, to be mobilized with the ECA loans. A senior official said that "We have already selected the contractors. They have come up with loans from the ECAs. The contractors will ensure funding and setting up of the plants.”

Financing from the ECAs the sources said that is hard term borrowing with a high rate of interest and a short maturity period 2 to 10 years.

The ECA loans are usually supplier's credits extended to the exporter but they may also be buyer's credits extended to the importer. The risk on these credits as well as on guarantees and insurance is borne by the sponsoring government.

An official of the Power Division said that the government has already approved USD 622 million ECA credit for the state owned Ashuganj Power Station Company Ltd for installing 2 gas fired power plants of 225 megawatt and 450 mw capacity respectively.

The APSCL signed a contract in October 2011 with the selected contractors South Korean Hyundai Engineering Company and Daewoo International Corporation to build the 225 mw gas based combined cycle power plant at Ashuganj station.

The Bangladesh Power Development Board signed contracts with Japanese and Korean companies to set up Bibiyana 399.28 mw base load combined cycle power plant in December last year.

As per the contracts, the BPDB will repay the loans at 3.28% interest rate over a period of 10 years.

The JV company of Guangdong Power Engineering Corporation and Guangdong Electric Power Design of China will set up the Shahjibazar 300 mw power station at a cost of USD 279.678 million.

Besides the JV of Harbin Electric International Company and CCC Engineering will install the 250 mw Barapukuria III power station at a cost of USD 248.87 million.

,BPDB official said that “The cabinet committee on government purchase in January this year approved the bid of the Shahjibazar 300 mw combined cycle power plant project and 250 mw Barapukuria III coal fired power station. The contractors will arrange loans from the ECAs to install the power stations. The contractors will come forward with the financers and set up the power stations. We will repay the money in seven to 10 years.”

Source - Financial Express

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