Clifford Capital, SMBC provide US$140m in loans for Summit Power's Bangladesh power plant project

CLIFFORD Capital, Sumitomo Mitsui Banking Corporation (SMBC) have provided US$140 million in loans to Summit Power International's subsidiary for a power plant project in the Gazipur district of Bangladesh.

Summit Power is a South Asia infrastructure developer and operator headquartered in Singapore.

The financing consists of a fixed-rate term loan from Temasek-backed Clifford Capital - a structured finance provider - and a floating-rate term loan from Japanese bank SMBC, the former announced on Monday.

Clifford Capital was also the joint coordinator for the senior secured term-loan financing for Summit Gazipur II Power, the Summit Power subsidiary.

The loans will be used for the development, construction and operation of a 300-megawatt oil-fired power plant, the first independent power project in Bangladesh to be financed solely by international commercial financing institutions. Previous projects were financed substantially by development finance institutions and multilateral development banks, Monday's statement noted.

The project was awarded in June 2017 under a scheme by the power division of Bangladesh's Ministry of Power, Energy and Mineral Resources. It had also achieved commercial operations on May 10, 2018.

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The power plant will supply power to the Bangladesh Power Development Board under a 15-year power purchase agreement with Bangladesh oil supplier Summit Oil & Shipping Co, which is part of the Summit group of companies.

The financing process concluded amid continuing lockdowns in Bangladesh and Singapore due to the Covid-19 pandemic.

"Both Clifford Capital and SMBC have demonstrated their value addition by working with other financiers and advisers as well as Bangladesh Bank to achieve this significant milestone by delivering a competitive bespoke financing package during this lockdown," said Summit group of companies chairman Muhammed Aziz Khan.