The International Finance Corporation, the World Bank’s private investment arm, has joined hands with two partners to make a co-investment of $175.5 million in an independent power producer in Bangladesh.
The IFC Emerging Asia Fund, a vehicle managed by IFC Asset Management Company, and EMA Power, a joint venture between Korea’s Daelim Energy and Islamic Development Bank Infrastructure Fund II, are backing the investment in Summit Group, the largest independent power producer in Bangladesh with a 1.5GW portfolio.
The funding will be used to seed the company’s future projects in the country where nearly a third of the 160 million population lacks access to the grid. Summit Group’s greenfield projects include a 500MW dual-fuel combined-cycle power plant and a 150MW heavy-fuel oil-based facility.
“The investment, via a newly set up Singapore company, Power International, is part of Summit Group’s plans for raising finance from international markets,” said Muhammed Aziz Khan, chairman and managing director of Summit Group, in a statement.
The Singapore-based vehicle aims to attract future rounds of funding from international investors through the private and public markets, IFC said.
IFC had previously financed other Summit Group-related projects, including the Khulna Power plant in 1999 and the Bibiyana facility in 2015. The institution had committed about $635 million in Bangladesh as of this June, in projects valued at about $1 billion.
The IFC Emerging Asia Fund, backed by the Korea Development Bank and the Fiji National Provident Fund, reached a first close in July. Established in April, EMA power looks to invest in power generation assets across the IDB member countries.