Raffles Infra clinches Bangladesh township project valued at about US$800m

RAFFLES Infrastructure Holdings has clinched the bid for a township development project in Bangladesh with a project value estimated at US$800 million.

The Trust Green City project involves the development of 50 acres (20 ha) of land with a construction area of about 10.8 million square feet in land area located in Zones 2, 3 and 4 of Baunia, Dhaka.

The mainboard-listed group on Thursday signed an exclusive and non-binding memorandum of understanding (MOU) with the Bangladesh Army Welfare Trust (AWT) to establish the preliminary framework for the project, set out areas of responsibilities, schedules of tasks and the timelines to sign definitive agreements.

The MOU will remain valid for six months from the signing date and may be renewed at the end of the duration at agreed terms and conditions.

Raffles Infrastructure will undertake the design, financing, construction, marketing, operation, and maintenance of Trust Green City.

The Trust Green City project is aimed at alleviating the severe housing shortage in Bangladesh, modernising Dhaka's residential sector and also leveraging on smart technologies to improve the lives of the population.

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The goal is to develop accommodation for the middle to low-income group, with civil and community facilities, Raffles Infrastructure said in a previous announcement.

Eric Choo, chief executive of Raffles Infrastructure, said: "Upon completion of this maiden project in Bangladesh, we aim to establish a stronger presence in the region where we are actively exploring more business opportunities."

The costs of the negotiations of the agendas will be funded through the group's internal resources and are not expected to have a material impact on Raffles Infrastructure's earnings per share or net tangible assets for the financial year ending June 30, 2020.

Raffles Infrastructure said on Dec 13, 2019 that it partnered KORAMCO Fund, a South Korean real estate and energy/infrastructure fund and asset management company to jointly submit proposals to tender for the township development project.

KORAMCO Fund is prepared to provide funding of up to US$80 million for the project. Raffles Infrastructure said the partnership with KORAMCO could take the form of a new joint-venture company or a contractual partnership.

The Bangladesh AWT is a welfare trust owned and operated by the Bangladesh Army which was founded to look after the interests and welfare of retired military personnel. Its assets include hotels, golf clubs, and shopping complexes.

Raffles Infrastructure shares were trading flat at S$0.33 as at 11.25am on Friday.