Sembcorp unit secures financing for power project in Bangladesh

SEMBCORP Industries' subsidiary, Sembcorp North-West Power Company, has secured project financing for its Sirajganj power project in Bangladesh.

"Sembcorp's Sirajganj power plant will allow us to provide cost-effective and reliable energy solutions to the country over a period of 22.5 years upon its completion," said Sembcorp's group president and CEO, Tang Kin Fei.

Philippe Le Houérou, executive vice-president and CEO of International Finance Corporation (IFC), a member of the World Bank Group, added: "This project has the potential to have a significant development impact - by alleviating Bangladesh's electricity shortages, lowering the cost of generation, and helping the country meet its growing demand for power."

IFC, together with Singapore-based infrastructure project financing firm, Clifford Capital, and the British government's development finance institution, CDC Group, each have a share of US$103 million in the total project finance debt.

A portion of Clifford Capital's tranche will benefit from political risk cover with IFC's World Bank affiliate, Multilateral Investment Guarantee Agency (MIGA). MIGA will also provide a political risk guarantee to Sembcorp for its equity investment in the project.

This marks IFC's first investment with Sembcorp and IFC-MIGA's first joint engagement in Bangladesh.

The power plant will be developed by Sembcorp North-West Power Company, which is a joint venture between Sembcorp Utilities and Bangladesh's state-owned North-West Power Generation Company. The project will be the second-largest independent power plant in the country, and represents the largest foreign direct investment into this sector in recent years.