Joint-venture co seeks $110m loan from India's Exim Bank

Rampal 1320-megawatt power plant is about to run out of coal stock and the exigency prompts the management to urge financial backup for the fuel import to continue operation, officials said.

Authority of the power plant, a joint-venture company owned by governments of Bangladesh and India, is now looking for a working-capital loan worth US$110 million from India's Export-Import Bank to open LCs for coal import, they added.

The company chairman, Dr Md Mokhles ur Rahman, senior secretary, the ministry of public administration, in a letter has sought finance secretary's intervention to secure the working-capital loan from the Indian bank.

The much-talked-about thermal power plant was established with concessional financing of $1.6 billion from the Government of India through EXIM Bank, under guarantee of the Government of Bangladesh.

"To ensure uninterrupted power generation, especially during the upcoming peak summer, adequate coal supply is essential," Mr Rahman writes in the letter.

He also states that the plant needs working capital worth around Tk 36 billion to ensue adequate coal supply.

However, the coal-fired power plant, presently with available working capital of Tk 17 billion, "coal is tied up only till 5th May 2025, and further LCs are urgently needed".

Set up close by the Sunderbans mangrove forests under the nomenclature of Bangladesh-India Friendship Power Company (Pvt) Limited (BIFPCL), the plant is a joint venture of Bangladesh Power Development Board (BPDB) and NTPC Limited, India.

According to the letter, BIFPCL has approached local banks for availing and enhancement of working capital, which, due to "procedural delays, may take 2-3 months, risking power generation".

As an alternative, the JV company approached the Indian EXIM Bank on 2nd April 2025 in Mumbai for a $110 million worth of working-capital loan. However, the plant authority has been told that the bank usually does not lend working capital.

"Though IEXIM does not typically provide such loans, they may consider it if it follows the original funding model supported by a Sovereign Guarantee from Bangladesh," mentions the letter sent to the ministry of finance.

"This facility is crucial to maintaining generation and meeting debt-servicing obligations in June, September, and December 2025 under the existing term loan," it adds.

The firm plans to repay the proposed loan by December next year and remain within the approved exposure limit of $1.6 billion.

The plant authority requests finance ministry's intervention in taking up the matter with the government of India so that the loan is granted and facilitates continuation of the operation.

A N M Obaidullah, a Board Member of BIFPCL, and Member (Company Affairs), BPDB, told the FE Friday that in case of coal shortage, the plant in the past had acquired coal through "internal arrangements" to continue plant operation.

He said the agreement says a working capital has to be maintained for smooth operation of the power plant. "We are in talks with a couple of local banks and also with the Indian EXIM bank to get required working capital."

syful-islam@outlook.com