EXIM Bank warns Payra power plant over delayed repayment

China's EXIM Bank has warned the Bangladesh-China Power Company Ltd (BCPCL) that its failure to repay a US$129 million loan instalment due in early December could trigger a formal default event, potentially affecting other projects in Bangladesh financed by the bank.

The bank issued the caution after the joint-venture operator of the Payra 1,320MW coal power plant repeatedly missed instalment deadlines over the past few years, officials said, raising concerns about its overall repayment capacity.

In response, BCPCL has sought urgent intervention from the Finance Division to avert a default and protect Bangladesh's sovereign credibility in dealings with the Chinese lender.

BCPCL, a joint venture between North-West Power Generation Company Limited and China National Machinery Import and Export Corporation, operates the plant in Patuakhali, in south-central Bangladesh.

The warning was issued in a recent letter from China's EXIM Bank to BCPCL, which the company's managing director subsequently forwarded to the Finance Division, urging appropriate steps to ensure timely repayment of the 10th instalment, due on 8 December.

According to officials concerned, the EXIM Bank letter stated that as of November 25, 2025, no payment had been made against the 10th instalment, totalling US$129.30 million, covering both principal and interest.

The bank also noted that unpaid electricity tariffs, now around US$740 million, have severely disrupted BCPCL's loan repayment schedule.

"We have been monitoring the progress of your loan repayment with considerable attention," the bank said in the letter.

"Although EXIM Bank retains the right to invoke the Event of Default (EOD), it has consistently maintained a conciliatory stance, enabling you (BCPCL) to establish a robust financial foundation," it added.

The bank urged the company to ensure that the outstanding balance is made available by the due date "to prevent the imposition of EOD measures".

"…failure to do so will compel EXIM Bank to enforce EOD measures, which could detrimentally impact other ongoing projects in Bangladesh financed by EXIM Bank," the letter warned.

BCPCL took the loan from EXIM Bank of China to build the Payra 1,320MW coal-fired power plant, the first unit of which entered commercial operation in May 2020, followed by the second unit in December 2020.

The second phase of the Payra plant is currently under construction at the coastal power hub.

In his letter to the Finance Secretary, BCPCL Managing Director Qi Yue requested an urgent review of the situation and called for "appropriate steps" to ensure timely repayment of the instalment, emphasising the need to safeguard the credibility of the sovereign guarantee and protect Bangladesh's financial relationship with the Chinese lender.

syful-islam@outlook.com