January 30, 2011 / 10:39 AM / 8 years ago

Summit Power gets finance for GE joint venture

DHAKA, Jan 30 (Reuters) - Bangladeshi company Summit Power SMPL.DH said a joint venture with U.S. group General Electric (GE.N) had signed financing deals for new power plants that will generate 676 megawatts of electricity.

“We have signed two agreements to get funds worth of $327 million,” Muhammad Aziz Khan, chairman of Summit Group of companies, said on Sunday.

Summit will get $115 million from the World Bank’s Investment Promotion Facilitation Fund while $212 million will be raised through zero-coupon bonds, he told Reuters.

The deal ensures a large part of financing for three projects expected to begin production in early 2013 of electricity costing less than 2 taka ($0.03) per kilowatt hour.

“This will remove the burden of blackouts from Bangladesh by 2013 and enable 2 percent of additional GDP growth above the usual 5.5 percent GDP growth, meaning we will achieve about 8 percent GDP growth,” Aziz said.

The government is working on a plan to generate 9,000 MW of electricity by 2015 to tackle power shortages that often stir public protests. The impoverished country faces a daily shortfall of 2,000 MW of electricity and more than 300 million cubic feet of gas, and the gap is widening.

Bangladesh, whose economy has grown on average by 6 percent since 2003, has seen power demand sharply outstripping supply, resulting in frequent cuts and economic losses estimated at nearly $1 billion a year. (Reporting by Serajul Islam Quadir; Editing by Dan Lalor) ($1= 71 taka)

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