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Sembcorp has reached financial close on the Sirajganj greenfield gas-fired power PPP project in Bangladesh.
International Finance Corporation (IFC), along with Singapore-based specialist provider of structured finance solutions, Clifford Capital and CDC Group plc, have acted as the lenders in connection with the financing of the approximately US$412 million project.
The debt package is approximately US$309 million and is divided among the lenders, as well as the Japan International Cooperation Agency, brought in by IFC. A portion of Clifford Capital's tranche will be covered by the Multilateral Investment Guarantee Agency. The tenor of the loans is the longest project financing debt tenor to be achieved in Bangladesh. Shearman & Sterling advised the lenders on the transaction.
The project was procured as public-private partnership on a build, own and operate (BOO) basis and is scheduled to commence simple cycle operations in 2018. The BOO project was awarded to Sembcorp Utilities by the Government of Bangladesh in September 2015, the first of its kind with a foreign investor in the power sector in Bangladesh.
SembCorp Utilities will own 71% in the project and the Bangladesh state-owned North West Power Generation Company Ltd. will hold the remaining 29%. Upon completion, the plant will supply power to the grid under a 22.5-year power purchase agreement (PPA) with the Bangladesh Power Development Board.
The plant, with a total capacity of 414 MW, will include one Gas Turbine (GT) unit; one set of heat recovery steam generator; one steam turbine generating unit with associated auxiliary equipment; fuel gas transportation, compression and conditioning system; HSD system; cooling water system; and water treatment facility. A 230 kV substation connects the complex to the national transmission system and the 30” East-West gas pipeline crossing the Jamuna Bridge is located 1.6 km away from the site.
The Sirajganj site was developed as a major power generation complex in the north-west region of Bangladesh; Sembcorp is already operating a 225 MW plant within the same complex and commenced the construction of another project there in early 2016. The project will thus be the fourth power project to be located within the Sirajganj complex.