DHAKA: Summit Group has attained the ability to finance billion-dollar projects thanks to its goodwill in implementing successful ventures, wooing global investors to team up with the company to tap opportunities in Bangladesh, said a top official.
Ayesha Aziz Khan, finance director of Summit, said foreign investors are keen on investing in the company’s Bibiyana II and Meghnaghat power projects.
“They have also offered to invest more than $400 million in equity in future Summit projects,” she told to media.
Her comments came as the 340-megawatt Meghnaghat plant in Narayanganj started producing power commercially for the national grid.
Also, the simple cycle part of the Bibiyana II project in Habiganj is producing 210MW on a test run basis and it will start to supply electricity on a commercial basis within a month.
The two developments will take the total power generated by Summit to 1,260MW, making the company the largest power producer in the private sector.
For the Meghnaghat project costing $319 million, Summit received long-term loans of $190 million from Standard Chartered, DEG of Germany, FMO of the Netherlands, Opec Fund for Industrial Development of Austria, CDC Group of the UK, OeEB (Development Bank of Austria), Belgian Investment Company for Developing Countries, and Infrastructure Development Company Ltd of Bangladesh.
Summit’s equity investment of $117.6 million in this project also makes it the single largest investor in a project by a local company.
The Bibiyana II 341MW gas-fired power plant, one of the largest independent power projects in Bangladesh, has received financing of $210 million from International Finance Corporation, Asian Development Bank and Islamic Development Bank.
Summit Industrial and Mercantile Corporation Ltd (SIMCL) owns 80 percent of this project and the rest 20 percent is owned by US conglomerate General Electric.
“Our balance sheet is very strong, helping to attract large amounts of equity investment from external sources,” said Khan.
Summit, with more than 25 years of experience, is a group of companies owned by SIMCL. Its investments are diversified across power, energy trading, port, telecoms, hospitality and real estate. The power sector accounts for 70 percent of its net revenue and 85 percent of net profits.
Khan said Summit borrowed from outside as local banks cannot lend a huge sum of money for long periods, despite sitting on huge liquidity.
“We just need to find ways to structure our policies and help the liquidity come to good investors and quality investment, such as in infrastructure.”
The government can provide some freedom to local companies so they can invest outside the country where opportunities are aplenty, said Khan.
The securities regulators must help all investors, small and large, feel comfortable to invest, she added.
“Because of a lack of a vibrant stockmarket, people are investing in unproductive sectors such as land, property and savings instruments. We don’t have adequate opportunities to invest.”
Summit would continue to do business in physical infrastructure development, she said.
