China Exim Bank cleares $1.6 billion for Payra power plant

Chinese Exim Bank has cleared a $1.6 billion credit for the construction of Payra 1,320MW coal-fired power plant near proposed Payra Sea Port in Patuakhali.
The Authority cleared the non-concessional loan on December 29,2016 Company Managing Director AM Khurshedul Alam told the Daily Observer on Sunday. He said that the Chinese credit would carry about 2 per cent interest and LIBOR with a 15-year payback period and a four-year grace period.
"The total project cost was estimated at $2.4 billion, the project might not require the entire amount. However, the 660MW first unit of the power plant at Payra is expected to supply electricity from June, 2019," Khurshed said.
Six months later, the second unit of the same capacity would start power supply, he added.
"Payra coal fired power project has taken up a smooth pace as the authority successfully completed the financial closing of this project on time,' a senior official of the power division said.
On March 29, 2016, a $1.56 billion contract was signed with a Chinese consortium for engineering, procurement and construction of the Payra power plant at Patuakhali.
To implement the mega power project, government formed Bangladesh-China Power Company Limited. The company is a 50-50 joint venture between the state-run North-West Power Generation Company of Bangladesh and China National Machinery Import and Export Corporation.
The company is expecting to sell each unit of electricity from the Payra power plant at Tk 6.65 to the Power Development Baord while the cost of electricity from the Rampal power plant could exceed Tk 8 per unit, said the officials.
The first unit of the power plant, which will have 660MW capacity, is expected to supply electricity by April 2019.
The second unit, which will have the same capacity, will start generation six months later, said AM Khurshedul Alam, managing director of BCPCL.
The company estimated the possible price of electricity considering the supply cost of coal up to the project site to be $100 per tonne. The coal will be sourced from Australia, Indonesia or China.