In the Meghnaghat region, situated in the Sonargaon district of Narayanganj, Bangladesh, a groundbreaking initiative is unfolding. Unique Meghnaghat Power Limited (UMPL) is spearheading the development of an advanced 584 MW (net) gas-fired combined cycle power plant. This ambitious project aims to revolutionize Bangladesh’s energy landscape, utilizing natural gas/Re-gasified Liquefied Natural Gas (RLNG) and harnessing state-of-the-art combined-cycle technology.
At the core of this innovative venture lies GE’s cutting-edge H-Class Gas Turbine (GT), specifically the GE 9HA.01 model, complemented by a Heat Recovery Steam Generator (HRSG), and a Steam Turbine (ST). UMPL is positioned to leverage these advanced technologies to optimize efficiency and generate power in an environmentally sustainable manner.
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The recent financial close of $463 million marks a historic milestone, representing the largest Independent Power Producer (IPP) project financing and private infrastructure project financing in Bangladesh in recent years. This achievement is particularly noteworthy given the complex foreign exchange situation in Bangladesh and the global financial volatility stemming from the post-Covid pandemic recovery and geopolitical uncertainties.
“In this context, the foreign lenders and banks, being the pillars of global development institutions (DFIs) in Bangladesh, play a pivotal role in the economic development of the country,” UMPL’s Managing Director, Chowdhury Nafeez Sarafat, said.
With an estimated project cost of USD 612 million, UMPL is being financed at a debt-equity ratio of 75:25. The multi-sourced financing package includes a tranche covered by Export Credit Agency (ECA) from Standard Chartered Bank (SCB), with support from Swiss Export Risk Insurance (SERV). Additionally, three Development Finance Institution (DFI) tranches have been secured from the Asian Infrastructure Investment Bank (AIIB), Deutsche Investitions-und Entwicklungsgesellschaft (DEG), and OPEC Fund for International Development (OFID).
Out of the USD 360 million received in the first disbursement, ECA-backed lenders SCB disbursed USD 240.24 million, while AIIB, DEG, and OFID, serving as DFI lenders, disbursed USD 119.76 million.
Encompassing a sprawling 18.75 acres, the project stands as a testament to its immense significance. Reflecting a steadfast commitment to excellence and innovation in power generation, the estimated cost of this ambitious undertaking is approximately $520 million USD.
In a remarkable achievement, UMPL recently closed a significant financial deal, securing $463 million in long-term project financing from foreign lenders. The announcement, unveiled on December 13, was swiftly followed by the reception of the initial disbursement, a substantial $360 million, on December 18 of the preceding year.
Securing the funding for this project marks a historic achievement, representing the most substantial Independent Power Producer (IPP) project financing and private infrastructure project financing in Bangladesh over the past few years. This accomplishment is especially noteworthy considering the challenging foreign exchange situation in Bangladesh and the financial turbulence in the global market caused by the post-Covid pandemic recovery and global political uncertainties.
Visionary Leadership Speaks
UMPL operates as a consortium, uniting the strengths of Strategic Finance Ltd (SFL), Unique Hotels & Resorts PLC (UHRL), and Nebras Power Investment Management BV (Nebras Power). Together, they have successfully orchestrated the construction and commissioning of the power plant, rendering it ready for commercial operation, as stated in a press release.
Chowdhury Nafeez Sarafat, the Managing Director of UMPL, expressed confidence in the economic development of Bangladesh, citing the financing as a manifestation of trust from global Development Financing Institutions (DFIs) and banks. Sarafat highlighted the use of the GE 9HA gas turbine, known for its exceptional efficiency of more than 62% at site conditions. He emphasized that the commercial operation of this project would optimize gas utilization during periods of natural gas scarcity, positioning it as a world-class infrastructure project, providing cleaner, reliable, and affordable electricity to the people of Bangladesh.
Anupam Hayat, Chief Financial Officer of UMPL, expressed joy in announcing the financial close. Acknowledging the challenges posed by the Covid-19 pandemic and geopolitical events, Hayat extended gratitude to lenders, sponsors, regulators, the management team, and all advisors for their cooperation during these challenging times.
Paving the Way for Cleaner and Affordable Electricity
As UMPL approaches commercial operation, the project is poised to become a world-class infrastructure venture, providing cleaner, reliable, and affordable electricity to the people of Bangladesh. Anupam Hayat, chief financial officer of UMPL, expressed his joy at the successful financial close, acknowledging the challenges posed by the Covid-19 pandemic and the Russia-Ukraine war impacts. He extended gratitude to lenders, sponsors, regulators, the management team, and all advisors for their collaboration during these difficult times. This collective effort stands as a testament to the resilience and determination of UMPL and its partners in contributing to the progress and prosperity of Bangladesh.
Scenario of Power Plants in Bangladesh
- Legislative Initiative: Rental power plants established since 2009 to address power demand
- Power Purchase Agreement (PPA): Bangladesh Power Development Board (BPDB) procures electricity at US cents 5.7 per kilowatt-hour
- Diversification of Energy Sources: Approval for a 660 MW base-load combined cycle plant in October 2021
- Ensuring a Resilient Energy Future: Commitment to diversify and secure the country’s energy landscape
As UMPL moves forward with its world-class infrastructure project, it is poised to provide cleaner, reliable, and affordable electricity to the people of Bangladesh, setting new standards for sustainable power generation in the region.