Asian Development Bank, International Finance Corporation, and Islamic Development Bank signed loan documents on Tuesday to provide $210 million financing to Summit Bibiyana II Power Company Limited (SBIIPCL), a company set up by Summit Industrial and Mercantile Corporation (Pvt.) Limited (Summit), and GE Energy, LLC (GE), for a 341 MW gas based power plant in Sylhet.
The direct loan amount is the largest given to a Bangladeshi private sector project by any of the three development agencies. This will be the largest project finance transactions development by a Bangladeshi company. The proposed investment also fits well with the regional development strategy of three multilateral development banks.
Of the total loan amount, the ADB is going to finance $75 million to a private sector gas-fired power plant in Bangladesh to help the country overcome severe power shortages.
A financing agreement was signed on Tuesday in this regard for Summit Bibiyana II Power Company Limited, a joint venture between Summit Industrial and Mercantile Private Limited and General Electric Energy.  
Prime Minister’s Energy Adviser Dr Tawfiq-e-Elahi Chowdhury, Summit Group Chairman Aziz Khan, Director Ayesha Aziz Khan were present.
“The project will benefit households, business and industry by improving access to electricity,” said Hayato Hoshi, senior investment specialist with ADB’s Private Sector Operations Department.
“It will also help further promote private sector investment in Bangladesh’s energy sector where few major independent power producers of this size have materialised in the last decade,” he added.
Because of frequent power outages, many industrial and commercial businesses depend on inefficient and expensive alternatives of generating electricity, such as burning diesel or oil.
The power shortages also caused periodic load shedding and adversely impact the country’s economic growth and poverty reduction efforts.
To address power deficits, the government has a master plan to develop 12,000MW of additional power capacity over the next five years to meet demand, increase its electrification rate and diversify its fuel sources including renewable energy.
The Bibiyana II Gas Power Project involves the design, engineering, construction, and operation of a 341MW combined-cycle gas-fired power plant to be located on the south bank of Khushiyara river, some 180kms northeast of Dhaka.
Its construction is expected to be complete by October 2015, and the plant will produce around 2,500 GW-hours of power annually.
Summit Industrial and Mercantile Private Limited, a leading local independent power producer, has 80 percent stake in Summit Bibiyana II Power Company Limited, while General Electric Energy, a well-developed global business in gas fired power projects holds 20 percent stake.
The company entered a 22-year power purchase agreement to sell all electricity generated from the project exclusively to the Bangladesh Power Development Board, the country’s state-owned electricity company.
‘Bibiyana II is producing the lowest cost electricity and will provide the most important requirement for industrial growth to the country. Summit will keep working to provide electricity to eradicate poverty and bring about inclusive sustainable growth for the people of Bangladesh with its strong financial and management strength. We have raised more than $500 million from foreign lenders over last four years’ said Ayesha Aziz Khan, Director of Summit Group.
‘IFC is proud to be part of this project because our investment will send a positive signal to other private sector players in Bangladesh, who are planning to develop efficient power projects aimed at expanding access to power,’ said HyunChan Cho, IFC Regional Industry Head for Infrastructure and Natural Resources.
‘Apart from meeting the power demands of the country, the project is providing reliable employment opportunity during construction and operational phases,’ said Tariqur Rashid, DMD of Summit Turbine Division.
‘For IDB, this is part of its commitment for infrastructure development in its member countries and is extremely pleased with this support to the private sector participation in the power generation capacity of Bangladesh,’ stated Dr. Walid Abdelwahab, Director Infrastructure at Islamic Development Bank.

News:Daily Sun/4-Jue-2015