Mumbai / Delhi, 7 June 2018: Islamic Development Bank (IsDB) along with The Asian Infrastructure Investment Bank (AIIB) and Infrastructure Development Company Limited has (IDCOL) signed a long-term financing facility with Nutan Bidyut (Bangladesh) Limited (Company). The agreement will see the organisations build, own and operate (BOO) a dual fuel combined cycle power plant in Bhola Island, Bangladesh, for a period of 22 years from the date of start of operations. With net generation capacity of 220 MW under Gas and 212 under HSD operation, once completed, the plant will generate an estimated energy output of 1,322,000 MWh per annum at an 80% plant load factor.

This is a first co-financing by IsDB in cooperation with AIIB and IDCOL for a Public Private Partnership project.

The Power Purchaser is Bangladesh Power Development Board, the government-owned entity which is the largest electricity generation and distribution entity in the Country. IDB is providing USD 60 million Ijara facility with a 18 years door to door tenor to support this project. The Sponsor, Shapoorji Pallonji Infrastructure Capital Company Private Limited is a part of the Shapoorji Pallonji group, a global institution with a leading presence in the sectors of Engineering & Construction – Infrastructure - Real Estate – Water - Energy - Financial Services.

The project is in line with the IsDB’s commitment to support the Sustainable Development Goals. Energy is the major pillar of the seventh Five-Year Plan - 2016-2021, of the Government of Bangladesh (GoB) as one third of the nation does not have access to electricity. The project will provide quality, reliable, sustainable and resilient infrastructure to have a strong development impact in the GoB’s initiative to increase the power generation capacity by 17,984 MW by the year 2021. It will provide Bangladesh with cheaper energy as compared to the conventional HDO / HSD fired capacity. Improving the competitiveness of the country, it will be instrumental in supporting economic development and human well-being, with a focus on affordable and equitable access for all. The project will also serve to promote foreign direct investments into the country. 

This announcement comes as the AIIB and IsDB sign a Memorandum of Understanding (MOU) on 25th June 2018 to establish a framework for strategic cooperation, including actively seeking to co- finance projects in common areas of operations. The overarching theme of the MOU will be "Mobilizing Financing for Infrastructure: Innovation & Collaboration".