Four companies get $120m WB fund
Four private borrowers, mostly from the power sector, got loans of $120.72 million from seven banks and financial institutions under an investment promotion programme of the World Bank.
Dhaka Bank gave $58.5 million to Ashuganj Energy Ltd, which would set up a 200-megawatt gas-based power plant. Eastern Bank, Mutual Trust Bank and Trust Bank jointly provided $20 million to Midland Power Company to help establish a 51MW power plant in Ashuganj, Brahmanbaria.
Baraka Patenga Power Plant in Chittagong received $23 million from United Commercial Bank for setting up a 50MW power plant.
The banks financed the three power plants under the World Bank's Investment Promotion and Financing Facility (IPFF) project of $257 million.
The rate of interest on the loans is LIBOR plus 3.30 percent. This means the average rate would be 5 percent to 6 percent whereas the market rate on term lending by the banks is 12 percent to 14 percent.
The borrowers would repay the loans in 12 years with a grace period of three months.
AB Bank, United Commercial Bank and IIDFC, a financial institution, provided $19.22 million in loan to Fiber@Home Ltd, a fibre optic cable network company.
IPFF channels long-term financing through Bangladesh Bank to the eligible participating financial institutions following a public-private partnership framework, World Bank said in a statement yesterday.
The WB and the government jointly reviewed the implementation status of IPFF project and noted satisfactory progress, according to the statement.
Two other power plants of 250MW each, health infrastructure in Chittagong and a dry dock near Chittagong port are in the pipeline, the multilateral lender said.
In 2010, the WB started implementing the project through Bangladesh Bank. Since then, the lender financed seven small power plants, an inland container terminal, three water treatment plants and a nationwide fibre optic cable network.
The WB said the IPFF project also supports institutional capacity building of the government's PPP office and provides technical support for infrastructure project preparation.
The PPP office is actively working to develop a robust pipeline of medium and long-term infrastructure projects.
A BB official said they have arranged another fund from the WB recently so that private investors get low-cost fund. Loan distribution from the fund will start soon, the official said.
Comments