Bank of China contributes to $210 million syndicated loan for 220MW Bhola 2 CCGT Refinancing Project

📋 Staff Comments

1. Bridgin Power Private Limited is a Singapore-incorporated power generation subsidiary of Actis (a UK-based investor).
2. Actis is a leading global investor in sustainable infrastructure and Bridgin Power is a platform newly formed by Actis pursuing gas-fired power generation projects in South-East Asia and Bangladesh.
3. The legal advisers to the lenders and the sponsors, Shearman & Sterling LLP and Clifford Chance LLP, respectively, led the development and optimization of the bespoke refinancing structure.
4. Nutan Bidyut (Bangladesh) Ltd holds a 22-year power purchase agreement (PPA) with Bangladesh Power Development Board.
5. Shearman & Sterling and Farooq & Associates advised the lenders. Clifford Chance advised Actis. See https://chambers.com/articles/refinancing-of-bhola-ipp-in-bangladesh and https://law.asia/clifford-chance-shearman-bangladesh-power-plant-buy/ and https://www.cliffordchance.com/news/news/2022/07/clifford-chance-advises-actis-on-landmark-acquisition-and-refina.html 6. On June 7, 2022, the Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group, issued guarantees totaling $407 million to cover the acquisition and refinancing of Nutan Bidyut (Bangladesh) Limited, the project enterprise that owns and operates the Bhola-2 220MW, dual fuel (gas/HSD) combined cycle power plant. The MIGA guarantees covers equity investments by Actis against the risk of breach of contract-arbitral award default for a period of up to 20-years. The MIGA guarantees will covers the non-shareholder loans made by a group of international banks “represented by Mizuho Bank, Ltd.” for up to 18-years against the risks of transfer restriction, expropriation, war and civil disturbance, and breach of contract-arbitral award default. See https://www.miga.org/project/bhola-2-220mw-combined-cycle-power-plant-1 and https://documents1.worldbank.org/curated/en/633631650555609238/pdf/Minutes-of-a-Meeting-of-the-Board-of-Executive-Directors-of-the-Bank-on-March-7-2022-and-Record-of-Approvals-March-2-thru-7.pdf 7. Under the deal, existing project financing provided by Asian Infrastructure Investment Bank, Islamic Development Bank and IDCOL Bangladesh was replaced by commercial bank debt provided by a syndicate of Sumitomo Mitsui Banking Corporation, ING Bank NV, DBS Bank Ltd, Bank of China Limited, Mizuho Bank Limited and Société Générale. The IPP refinancing in Bangladesh was achieved through a bespoke refinancing and settlement structure integrated with the acquisition process.
6. There is some evidence that the borrowing institution was not Nutan Bidyut (Bangladesh) Ltd but rather Actis Ambergen 2 Limited -- a Mauritius-incorporated special purpose vehicle and wholly-owned subsidiary of Bridgin Power Private Limited, which is itself a subsidiary of Actis (UK-based investor) — or Actis Energy 5B Limited (or Actis Energy 5 B LP). This issue warrants further investigation.

📚 Sources & References

• Bhola 2 IPP – A Bangladesh milestone
• Proximo Weekly: Debt and power cuts in Bangladesh, 220MW Combined Cycle Power Generation Facility at Bhola Project
• Bhola Gas-Fired Power Plant (220MW) Refinancing 2022
• B h o l a I I g a s - fi r e d r e c a p i t a l i s a t i o n
• B a n g l a d e s h Loan applications and disbursements are still being received and processed as the projects continue to evolve. Ongoing monitoring and evaluation are in place to ensure project continuity.