Fund crunch hits BEXIMCO's Korotoa solar plant as Sukuk maturity nears

The completion of BEXIMCO's 30 MW Korotoa Solar Plant has become uncertain due to a funding shortfall, as the central bank and investors have shown reluctance to extend support to the sukuk-issuing company.

BEXIMCO raised Tk 30 billion by issuing sukuk bonds in 2021 to construct two solar power plants and expand its textile division. Of the two plants, the 200 MW Teesta Solar Plant came into operation in August 2023, while Korotoa has been partially built.

The Beximco conglomerate fell into ruin, leading to workers' unrest, with the unveiling of a hefty amount of defaulted loans after the 2024 ouster of the Awami League regime and the subsequent arrest of the group's Vice Chairman Salman F Rahman.

Amid the financial distress, BEXIMCO has sought Tk 2 billion from the income of the Teesta plant to complete the Korotoa Solar Plant and make it operational.

A senior official of the Investment Corporation of Bangladesh (ICB), trustee of the sukuk bond, however, said the central bank had instructed them not to divert any funds from the income of the Teesta plant.

"Many sukuk holders also oppose spending Teesta's income on any construction by BEXIMCO."

The Teesta plant has been supplying electricity to the national grid as per a 20-year contract with the government.

As the sukuk is approaching maturity in December this year, the company faces the obligation to pay the principal amounts to the bondholders.

The central bank is of the opinion that the income generated from the Teesta plant should be stowed away to make payments of the principal amounts to the sukuk holders, said the ICB official, wishing not to be named.

The trustee of BEXIMCO's sukuk has so far received revenue worth Tk 16.27 billion from the operation of the Teesta plant and Tk 3.63 billion from the company's textile division in dividends.

Out of the accumulated income, Tk 11.73 billion has so far been distributed to sukuk holders as returns on their investments, while another Tk 3.10 billion was spent on the maintenance of the Teesta plant.

Currently, the trustee has Tk 5.07 billion left with it. BEXIMCO seeks Tk 2 billion from this amount.

The ICB official said the trustee would require Tk 1.47 billion at the end of June to pay coupons to sukuk holders. Hence, only Tk 3.60 billion would remain available for further payments.

Of the total principal amount of Tk 30 billion raised from investors in 2021, the sukuk holders converted debt securities worth Tk 2 billion into shares of BEXIMCO. So, the company will have to pay back Tk 28 billion on the maturity of the bond in December.

Meanwhile, Bangladesh Bank formed a 10-member committee led by Deputy Governor Md Kabir Ahmed in June 2025 to review the structural risks of the sukuk bond and suggest an extension of its tenure if required. The committee had representatives from some banks that purchased the units of the sukuk.

In a report submitted to the central bank in December last year, the committee said the distribution of the principal amount would be possible within 2031 if Korotoa became operational.

Otherwise, the timeframe would have to be extended to 2032.

The ICB official said the Teesta plant's performance is very good in the context of the nationwide power crisis.

"But the problem is that the central bank and the sukuk holders do not want financial support extended to the scam-hit BEXIMCO," he added.

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