DHAKA: International Finance Corporation, the private finance arm of World Bank, has agreed to extend finance in the form of debt and equity to Excelerate Energy Ltd to build Bangladesh’s first LNG import terminal. The total cost of the project is estimated to be at $179.4 million, which the company plans to finance through 70 per cent debt and 30 per cent equity. “IFC will lend up to $34.1 million for its own account through an A loan and will mobilize up to an additional $91.4 million in Parallel loans or IFC B Loans.
IFC also expects to invest up to $10.8 million in equity for its 20 per cent equity share in the Project Company,” IFC said in a disclosure. The pis being co-developed via a special purpose vehicle, Excelerate Energy Bangladesh Ltd, by the IFC and Excelerate Energy Ltd. It entails development, construction, operation and transfer of an offshore marine terminal to support the transfer, storage and regasification of liquefied natural gas for delivery to an onshore transfer location in Bangladesh. Once completed, the project is expected to be the first LNG import terminal in Bangladesh, which has been facing natural gas shortages due to growing energy demand and depletion of natural gas reserves. IFC has been investing strategically in Bangladesh having deployed over $1 billion in the country so far. It recently agreed to extend up to $18 million in loan and said it would mobilise another $18 million from a development finance institution (DFI) to fund the construction of a hotel project by the Bengal Hotels and Resorts Ltd (BHRL), part of the Bengal Group in Bangladesh.
In late March, it partnered with Japanese agency JICA to provide $165 million loan to Sembcorp North-West Power Company to expand power-generation capacity in Bangladesh. The LNG project was bid out in 2011 and the Excelerate-led consortium was selected as the preferred bidder in 2012. IFC InfraVentures’ joined the Project in 2013 and helped facilitate the process between Excelerate and the government. According to the disclosure, IFC played a key role during the negotiations and execution of the commercial contracts with Petrobangla as well as in the concession agreement discussions to ensure its bankability for international lenders by leveraging IFC experience financing power projects in Bangladesh and financing LNG regasification terminals in other emerging markets.
