THE Asian Infrastructure Investment Bank’s (AIIB) board of directors has approved a loan of up to US$60 million for a project that will increase power generation capacity in Bangladesh, and help the country address its chronic power shortages.
The loan will support the development of Bangladesh Bhola IPP, a greenfield 220-megawatt combined cycle power plant in Bhola island in the Barisal district of Bangladesh.
The Bangladesh Bhola IPP is the first project that the AIIB has financed alongside the Islamic Development Bank, and the Bangladesh Infrastructure Development Company Limited (IDCOL).
“Bangladesh’s acute power shortages are impacting its economic growth and its effort to reduce poverty,” says AIIB vice president and chief investment officer, DJ Pandian. “This investment will help Bangladesh increase its power supply to support industries that are vital to growth, and will help reduce the number of individuals who currently live without electricity.”
Bangladesh Bhola IPP is one of three energy projects in Bangladesh that have received funding from AIIB. All three projects are aligned with the Government of Bangladesh’s target to achieve affordable electricity for all by 2021. This approach will enhance distribution capacity, increase the number of rural and urban electricity consumers, improve efficiency in gas production, expand gas transmission pipeline capacity and increase power generation capabilities in Bangladesh.
“We’re investing in this project because it will be one of the most efficient power plants delivering low-cost power in Bangladesh,” says AIIB director general, Dong ik Lee. “This investment will also help mobilize private capital and provide critical long-term financing that is not readily available in Bangladesh for vital infrastructure projects.”
The power project will be developed by Shapoorji Pallonji Infrastructure Capital Company Private Limited through Nutan Bidyut (Bangladesh) Limited, a special-purpose vehicle incorporated in Bangladesh for the sole purpose of developing the project.
