The finance ministry has directed the Bangladesh Bank to take necessary steps to facilitate the payment of more than $7.6 million to the Industrial and Commercial Bank of China (ICBC) and the Export-Import Bank of China (Exim Bank) as part of an installment under a buyer’s credit syndicated loan agreement.
This directive aims to ensure the timely payment of the 17th installment of a loan originally borrowed to construct the Kodda 150 MW Dual Fuel power plant in Gazipur.
Under the terms of the loan agreement, more than $129.26 million was borrowed from ICBC and Exim Bank of China to finance the power plant project.
The total loan is to be repaid in 20 installments, with 16 installments already paid. The next installment, the 17th, is due for an amount exceeding $7.6 million.
The loan agreement, signed by the state-owned power generation company B-R Powergen Ltd with ICBC and Exim Bank of China, was backed by a sovereign guarantee from the Finance Division of Bangladesh.
This guarantee ensures that the government is committed to fulfilling the obligations of the loan agreement, including timely installment payments.
As part of the regular process, the Bangladesh Bank typically provides the necessary funds to the private commercial Dhaka Bank, which then handles the payment to ICBC and Exim Bank of China.
This process has been followed for the previous installments and is expected to be adhered to for the upcoming payment as well.
Requests from ICBC and Exim Bank of China have underscored the necessity for timely payments, reminding B-R Powergen Ltd. of the importance of adhering to the payment schedule outlined in the loan agreement.
According to section 5.2 of the agreement, a default interest is stipulated if payments are delayed, making timely payments critical to avoiding additional financial penalties.
