The Asian Infrastructure Investment Bank (AIIB) has agreed to grant a loan of up to $60m for a 220MW combined cycle power plant in Bangladesh.
The project will increase power generation capacity in Bangladesh and help the country respond to power shortages.
The approved debt financing 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.
Once complete, the project will increase power generation by around 1,300 gigawatt hours annually.
AIIB vice president and chief investment officer D. J. Pandian said: “Bangladesh’s acute power shortages are impacting its economic growth and its effort to reduce poverty.
“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.
AIIB director general Dong ik Lee said: “We’re investing in this project because it will be one of the most efficient power plants delivering low-cost power in Bangladesh.
“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 Bangladesh Bhola IPP project marks the first project AIIB has financed alongside the Islamic Development Bank and Infrastructure Development Company Limited.
The 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.