July 31, 2020
On July 30, the Asian Development Bank (ADB) signed a loan agreement for a combined-cycle gas-fired power generation project in Bangladesh utilizing the “Leading Asia's Private Infrastructure Fund” (LEAP).
This project will provide a long-term loan for a 718-megawatt combined-cycle gas-fired power generation project in Meghnaghat near Dhaka in central Bangladesh, which will be the largest private gas-fired power plant in the country. Included in the ADB's loan is $100 million in direct financing and $100 million in LEAP financing. JERA Co., Ltd., a joint venture company of Tokyo Electric Power Group and Chubu Electric Power Co., Inc., participated in this project as a sponsor. The project is co-financed by the Japan Bank for International Cooperation (JBIC), as well as four commercial banks, with the insurance by Nippon Export and Investment Insurance (NEXI).
In Bangladesh, despite increases in installed generation capacity over the past decade, the domestic power supply cannot fully meet increasing power demands. This project is a gas-fired combined-cycle power plant that utilizes natural gas and will increase the power generation capacity of the country by 4%. Highly energy-efficient power generation through this project is indispensable for both expanding the power supply and closing the power demand and natural gas supply gap, which is critical for developing sustainable industrial and economic growth, and reducing energy imports and reliance on environmentally high burden and costly fuels. In addition, this project is expected to encourage further mobilization of future financing of the similar large-scale power plants in Bangladesh.
The LEAP Fund is a part of the follow-up measure for the “Partnership for Quality Infrastructure,” which was announced by the Japanese government on Nov. 21, 2015. Targeting high quality private infrastructure projects in the Asia-Oceania region, the fund provides assistance for such projects organized under various arrangements, such as public-private partnerships. In March 2016, JICA approved a $1.5 billion investment in private sector investment financing for the LEAP Fund. The LEAP Fund provides support for a wide range of sustainable infrastructure projects undertaken by the private sector in ADB member countries of the Asia-Pacific region, and is directed at projects in fields such as reduction of greenhouse gas emissions, energy efficiency, and provision of medical services at reasonable prices.
JICA will continue its collaboration with countries and international organizations to promote quality infrastructure investment and contribute to social and economic development in developing countries and regions based on the Sustainable Development Goals (SDGs).