City Bank arranges Tk 742cr for power plant

City Bank has arranged a Tk 742 crore syndicated loan with Bank Asia and Eastern Bank for a heavy fuel oil-based power plant being run by Manikganj Power Generations Ltd.

The financing will help the power plant operate smoothly, said a City Bank official. The plant, located at Shingair of Manikganj, has a production capacity of 162 megawatts (MW) and is owned by Doreen Group.

City Bank provided Tk 217 crore and credit guarantee of Tk 525 crore, of which Tk 355 crore is from Bank Asia and Tk 170 crore from Eastern Bank.

Providing credit guarantee means City Bank will have to repay the fund to the two banks if the borrower fails to pay back the loans.

The repayment tenure of the loan is 10 years.

A syndicated loan, also known as a syndicated bank facility, is financing offered by a group of lenders—referred to as a syndicate—who work together to provide funds for a single borrower.

The borrower can be a corporation, a large project, or a sovereign government. The loan can involve a fixed amount of funds, a credit line, or a combination of the two.

The power plant started it production in December last year.

City Bank held a financial closure ceremony in Renaissance Dhaka Gulshan Hotel on October 14 marking completion of the process for the syndicated financing, which was given out in August.

Tahzeeb Alam Siddique, managing director (MD) of Manikganj Power Generations Ltd, Mashrur Arefin, MD of City Bank, Md Arfan Ali, MD of Bank Asia, and Ahmed Shaheen, deputy managing director of Eastern Bank Limited, were present.