UNB, Dhaka :
The government has approved proposals for taking foreign loans of $3.5 billion for two mega power projects -coal-fired Rampal and Payra power plants.
Of these, Rampal will get $1.6 billion from Indian Exim Bank while Payra will receive $1.9 billion from China Exim Bank, Power Division sources told UNB. According to the sources, the government’s top level committee on non-concessional loans, headed by Finance Minister AMA Muhith, approved the loan proposals in a meeting on September 15 and Power Division officially communicated the matter to the respective implementing agencies on Monday.
“After completion of necessary procedures, we have officially communicated the matter of loan approval to the respective authorities,” Mostafa Kamal, deputy secretary of the Power Division, told UNB.
He, however, said the approved proposals will now go to the Law Ministry for legal vetting. “Once the proposals are cleared by the Law Ministry, the concerned authorities will move for signing deal
with foreign banks for receiving the loans,” he added. Power Ministry took up the two projects-each having 1320 MW capacity-as part of plan to generate 50 percent power from coal-fired power plants by 2030. But interestingly, two projects, located in two strategically important locations in the country’s southern coastal belt, will be implemented under joint venture with two joint Asian neighbours-India and China.
Of them Dhaka will execute the Rampal project with New Delhi while Payra plant will be built under joint venture with Beijing almost in the same period by 2019. Dhaka has 50:50 equity shares in both Rampal and Payra power projects keeping 30:70 equity-debt provisions for execution of the two mega power projects.
State-owned Power Development Board (PDB) tied up with Indian state-owned National Thermal Power Corporation (NTPC) to execute Rampal power plant through forming a special purpose company-Bangladesh India Friendship Power Company Ltd (BIFPCL). Similarly, state-owned Northwest Power Generation Company Ltd (NWPGCL) tied up with China National Machinery Import & Export Corporation (CMC) to implement Payra power plant under new joint venture-Bangladesh China Power Company Ltd (BCPCL).
Now the BIFPCL is moving ahead with Rampal project on behalf of Dhaka and Delhi while BCPCL is proceeding with Payra project on behalf of Dhaka and Beijing.
Both the BIFPCL and BCPCL appointed engineering, procurement and construction (EPC) contractors for their respective projects and also negotiated with foreign banks to take loans of upto 70 percent of the total financial requirements of the two projects. Interestingly, Indian Exim Bank is financing the Rampal project while China Exim Bank is financing the Payra project against the backdrop of no available financing from multilateral donor agencies like World Bank and Asian Development Bank on grounds of environmental concerns.
However, Rampal power plant has been facing tremendous opposition from local and international environmentalist groups because of its location near ecologically sensitive area of Sundarbans.
Official sources said Indian Exim Bank will give $1.6 billion with repayment provision of 20 years while China Exim Bank will provide $1.9 billion for repaying in 15 years. But nothing was disclosed as yet about the rate of interest of the loans and their grace periods.
The government has approved proposals for taking foreign loans of $3.5 billion for two mega power projects -coal-fired Rampal and Payra power plants.
Of these, Rampal will get $1.6 billion from Indian Exim Bank while Payra will receive $1.9 billion from China Exim Bank, Power Division sources told UNB. According to the sources, the government’s top level committee on non-concessional loans, headed by Finance Minister AMA Muhith, approved the loan proposals in a meeting on September 15 and Power Division officially communicated the matter to the respective implementing agencies on Monday.
“After completion of necessary procedures, we have officially communicated the matter of loan approval to the respective authorities,” Mostafa Kamal, deputy secretary of the Power Division, told UNB.
He, however, said the approved proposals will now go to the Law Ministry for legal vetting. “Once the proposals are cleared by the Law Ministry, the concerned authorities will move for signing deal
with foreign banks for receiving the loans,” he added. Power Ministry took up the two projects-each having 1320 MW capacity-as part of plan to generate 50 percent power from coal-fired power plants by 2030. But interestingly, two projects, located in two strategically important locations in the country’s southern coastal belt, will be implemented under joint venture with two joint Asian neighbours-India and China.
Of them Dhaka will execute the Rampal project with New Delhi while Payra plant will be built under joint venture with Beijing almost in the same period by 2019. Dhaka has 50:50 equity shares in both Rampal and Payra power projects keeping 30:70 equity-debt provisions for execution of the two mega power projects.
State-owned Power Development Board (PDB) tied up with Indian state-owned National Thermal Power Corporation (NTPC) to execute Rampal power plant through forming a special purpose company-Bangladesh India Friendship Power Company Ltd (BIFPCL). Similarly, state-owned Northwest Power Generation Company Ltd (NWPGCL) tied up with China National Machinery Import & Export Corporation (CMC) to implement Payra power plant under new joint venture-Bangladesh China Power Company Ltd (BCPCL).
Now the BIFPCL is moving ahead with Rampal project on behalf of Dhaka and Delhi while BCPCL is proceeding with Payra project on behalf of Dhaka and Beijing.
Both the BIFPCL and BCPCL appointed engineering, procurement and construction (EPC) contractors for their respective projects and also negotiated with foreign banks to take loans of upto 70 percent of the total financial requirements of the two projects. Interestingly, Indian Exim Bank is financing the Rampal project while China Exim Bank is financing the Payra project against the backdrop of no available financing from multilateral donor agencies like World Bank and Asian Development Bank on grounds of environmental concerns.
However, Rampal power plant has been facing tremendous opposition from local and international environmentalist groups because of its location near ecologically sensitive area of Sundarbans.
Official sources said Indian Exim Bank will give $1.6 billion with repayment provision of 20 years while China Exim Bank will provide $1.9 billion for repaying in 15 years. But nothing was disclosed as yet about the rate of interest of the loans and their grace periods.
