SUMMIT Gazipur II Power Limited, a subsidiary of Summit Power International, secured financing of US$140 million on May 18 for the development, construction and operation of a 300MW oil-fired power plant in the Gazipur district of Bangladesh.

The financing comprised a combination of a fixed rate term loan provided by Clifford Capital, a provider of debt financing solutions to companies and projects with a nexus to Singapore in the infrastructure and maritime sectors, alongside a floating rate term loan provided by Sumitomo Mitsui Banking Corporation (SMBC).

This transaction marks a significant milestone in the project financing market in Bangladesh as it is the first independent power project to be financed solely by international commercial financing institutions, whereas prior projects had been financed substantially by development finance institutions and multi-lateral development banks.

The financing process was completed despite continuing lockdowns in Bangladesh and Singapore as a result of the Covid-19 pandemic, highlighting the constructive approach taken by both lenders as well as the sponsor in overcoming the practical challenges faced in closing a project financing transaction in these difficult times.

This transaction also marks the first project financing concluded between Clifford Capital and Summit Power International, a leading infrastructure developer and operator in South Asia that is headquartered in Singapore.

Summit Power International received strong and constructive support from Clifford Capital and SMBC throughout the financing stages of the project, relates Muhammed Aziz Khan, chairman of Summit Group of Companies. “Both Clifford Capital and SMBC have demonstrated their value addition by working with other financiers and advisers as well as Bangladesh Bank to achieve this significant milestone by delivering a competitive bespoke financing package during this lockdown."

Clifford Capital, as joint coordinator, played a key role in the structuring and execution of the financing and led the legal, financial modelling and insurance due-diligence work streams.

The project was awarded in June 2017 under a scheme by the Power Division of the Ministry of Power, Energy and Mineral Resources of Bangladesh to deliver 2,600MW of fast track power projects to meet the growing need for power in the country.

The project will supply power to the Bangladesh Power Development Board under a 15-year power purchase agreement with a long-term fuel supply agreement with Summit Oil & Shipping, the largest fuel oil supplier in Bangladesh and part of Summit Group of Companies.

The project achieved commercial operations on May 10 2018, and had since been supplying reliable power into the grid, for the much-needed power for businesses and homes in Bangladesh with its growing economy.