Summit Group to raise $2.5b | The Daily Star
12:00 AM, September 08, 2016 / LAST MODIFIED: 12:09 AM, September 08, 2016

LNG Terminal, Power Plants

Summit Group to raise $2.5b

Summit Group has teamed up with international lenders and companies to raise $2.5 billion in equity and loans for setting up a LNG terminal and a number of power plants with electricity generation capacity of 2,000 megawatts.

The country's largest private sector power producer has already formed a company, Power International Pvt Ltd, for the purpose. The company is based in Singapore. 

The International Finance Corporation; the IFC Emerging Asia Fund, an investment fund managed by the IFC Asset Management Company; and Dubai-based EMA Power, a joint venture between Daelim Energy of South Korea and the Islamic Development Bank Infrastructure Fund II, own 50 percent share of the new company.

The three parties have already deposited $175.5 million in equity.

“We have received the funds,” Muhammed Aziz Khan, chairman of Summit Group, told reporters at a programme at Dhaka Club in the capital yesterday.

Of the equity, $120 million alone is coming from the IFC and the IFC Asset Management Company.

Power International has applied to the Singapore Stock Exchange for listing.

Once listed, the company would be able to raise $300 million from the market, while Summit Group would mobilise another $100 million from its own resources, Khan said.

“Then we will be able to borrow another $2 billion.”

Initially, Summit will use the funds to set up a LNG terminal in Moheshkhali and a 750MW LNG-based power plant in Meghnaghat, Narayanganj, said the company in a statement yesterday. 

The LNG terminal would be ready within two years after getting the permission from the government, while the first LNG-based power plant would be operational by the third year, according to Khan.

The company will have to set up offshore pipeline with a distance of 7 kilometres and another 7km onshore pipeline to be connected with the pipeline the government is setting up in Moheshkhali.

It is in talks with three Chinese companies to build the pipeline.

Summit also has plans to a 350MW dual-fuel combined cycle power plant and a 150MW diesel-based power plant.

It also plans to set up two more LNG-based power plant: one in Chittagong and the other in Moheshkhali.

The plants will be ready by 2021, to help the government's goal of raising the power generation to 24,000MW by then. 

“Once completed, the terminal and the power plants will be a game changer for the country as the projects would develop physical infrastructure as well as encourage private sector companies to follow suit.” 

The company has already proposed the government about the LNG terminal and the power plants.

Khan said his company would bring state-of-the-art engines from companies like GE or Siemens, which have about 57 percent efficiency.

Summit's most recently developed power plants -- Summit Bibiyana-II (341MW combined cycle gas turbine) and Summit Meghnaghat (337MW combined cycle gas turbine with dual fuel capabilities) -- are equipped with GE turbines. 

Both projects attracted international debt financing from institutions such as the IFC, the IDB, German investment and development corporation DEG, Dutch development bank FMO, UK government's finance institution CDC and Standard Chartered Bank.  

Summit Group currently has about 1,500MW of power generation capacity and is the largest independent power producer in Bangladesh, accounting for generating about 15 percent of overall output in the country in 2015.    

It now has $500 million in outstanding loans with international lenders such as the IFC and the IDB, carrying interest rate of 5 percent and repayment period of up to 14 years.

Stay updated on the go with The Daily Star Android & iOS News App. Click here to download it for your device.

Type START <space> BR and send SMS it to 22222

Type START <space> BR and send SMS it to 2222

Type START <space> BR and send SMS it to 2225

Leave your comments

Top News

Top News