China Exim Bank exits Payra Coal Power Plant (Phase-II)

5 June 2022

According to an anonymous source of the Power Division, the Export–Import Bank of China (CHEXIM) has cancelled the deal of investing USD 1,547 million for the second phase of the Payra 1320 MW Coal Power Plant. 

The Bangladesh China Power Company Limited (BCPCL) came to an agreement with CHEXIM in 2021 to finance USD 1,547 million for 15 years at LIBOR + 2.98% interest rate. The Government of Bangladesh (GOB) approved the terms and conditions of the loan and gave a sovereign guarantee in December 2021.  

The estimated budget of the power plant is USD 2,063.60 million in which CHEXIM was supposed to provide an external credit of 75% while the sponsor company, BCPCL, will invest the rest of the amount as equity.  

Meanwhile, BCPCL awarded an Engineering, Procurement and Construction (EPC) contract of USD 1,440 million to the consortium of China National Energy Engineering and Construction Company Limited (CECC) and First Northeast Electric Power Engineering Company Limited (NEPC) who were awarded the EPC contract for Payra Coal Power Plant (Phase-I) in 2016. 

Getting the information, Bangladesh Power Development Board (BPDB) has already suggested that North-West Power Generation Company Limited (NWPGCL) submit a revised Development Project Proforma (DPP) for consideration of the Government to invest from revenue, according to the source. 

The source also said that, the China Exim Bank informed the Economic Relations Division (ERD) about Chinese president Xi Jinping’s announcement of not building new coal-fired power plants abroad. 

It is to note that BCPCL is a special purpose vehicle (SPV) of NWPGCL and China National Machinery Import & Export Corporation (CMC). BCPCL received USD 1,984 million earlier to build the first phase of the Payra 1320 MW Coal Power Plant.