AIIB to lend $158.89m for power infrastructure project

Staff Reporter Published: 15 December 2024, 09:48 PM
AIIB to lend $158.89m for power infrastructure project

The interim government has entered into an agreement with the Asian Infrastructure Investment Bank (AIIB) for a $158.89 million loan to develop a power transmission infrastructure project through Power Grid Bangladesh PLC.

The loan has a 32-year maturity period, including a seven-year grace period, and will be disbursed in multiple currencies: $109.78 million, €29.42 million (equivalent to $30.90 million), and ¥132.49 million (equivalent to $18.21 million), as said in an official press release.

Loan terms

Interest Rates: 

USD: Secured Overnight Financing Rate (SOFR) + variable spread.

Euro: Six-month Euro Interbank Offered Rate (EURIBOR) + variable spread.

Chinese Renminbi: Three-month Shanghai Interbank Offered Rate (SHIBOR) + variable spread.

Fees: 

Front-End Fee: 0.25% of the total loan amount (one-time).

Commitment Fee: 0.25% of the undisbursed loan amount.

A “variable spread” refers to an additional percentage over the benchmark interest rate that adjusts based on factors like credit risk or market conditions. The front-end fee is a one-time charge applied when the loan is established or the initial disbursement is made.

Project focus

The agreement is tied to the "Southern Chattogram and Kaliakoir Transmission Infrastructure Development Project," which aims to enhance the power transmission capacity in these regions.

The signing took place on December 10, with Mirana Mahrukh, Additional Secretary to the Economic Relations Division, and Rajat Misra, Acting Vice President for Investment Clients Region I and Financial Institutions and Funds, representing their respective sides.

This project aligns with the country's efforts to strengthen its energy infrastructure and support sustainable development initiatives.