Orion Group signed an agreement with state-owned Agrani and Janata Bank for loan to expand its power sector business on Thursday.
Under the agreement, Dubai based Mashreq Bank will finance $75 million in two power plants of the country's leading business conglomerate. Agrani and Janata Bank will act as guarantors and both have contributed fifty-fifty on the loan, said a press release.
Apart from this, Orion Power Meghnaghat Limited and Dutch Bangla Power & Associates Limited — two concerns of Orion — will enjoy non-funded facilities such as stand by letter of credit from the state-owned banks.
The plants went into operation in 2010 with a capacity of 100 MW each. As part of continued interests in power generation, both the plants have invested with equity in two coal-fired power plants having 660MW capacity in Munshiganj.
The deal signing ceremony was held at the head office of Agrani Bank in Dilkusha, Dhaka. Orion Group Chairman Mohammad Obaidul Karim, Agrani Bank Managing Director Mohammad Shams-Ul Islam and Janata Bank Managing Director Md Abdus Salam Azad signed the agreement on behalf of their respective organisations.
The organizer said that Mashreq Bank previously never lent any Bangladeshi companies such big amount.
Orion Group Chairman Obaidul Karim thanked the state-owned bank and said they pioneered lending to the independent power producers responding to the call of the prime minister.
"It feels good to say that all those loan has been paid back smoothly and this sector has no defaulted loans," Obaidul Karim added.
He said, "Once we had to suffer from power outage every day. But, we have almost forgotten what is called load shedding, thanks to the efficient leadership of Prime Minister Sheikh Hasina."
Karim also admitted that there are hassles of coal-based power generation. "However, it reduces the subsidy of government," he argued.
Agrani Bank Managing Director Mohammad Shams-Ul Islam expressed his satisfaction over financing the power plants.
He said, "Agrani Bank has already financed in eleven power projects, while the non-performing loan is zero."
Meantime, Janata Bank Managing Director Md Abdus Salam said, "We hope the expansion of the power plants will contribute to achieve government's Vision 2021 and 2041, bringing the whole country under uninterrupted electric supply."
Salman Obaidul Karim, managing director of Orion Group, was also present among others.