HSBC Bangladesh yesterday struck a deal with Power Grid Company of Bangladesh Ltd (PGCB) to provide $60 million to help the state-run company improve its transmission network.
The British banking giant's credit facility includes $24 million in term loans.
Md Jamal Ullah, managing director of PGCB, and Md Mahbub-ur-Rahman, head of commercial banking of HSBC Bangladesh, signed the deal at Ruposhi Bangla Hotel in the city.
This is the first time a state-run energy company has obtained a commercial loan from a financial institution, Abul Kalam Azad, power secretary, told reporters. He said PGCB, a profit-making company whose revenue grew 14 percent last year, is being able to borrow the fund at commercial rate because of its strong financial health.
The interest rate is 4.5 percent and the loan is repayable within six years, said Jamal Ullah.
Andrew Tilke, chief executive officer of HSBC Bangladesh, expressed his bank's willingness to finance similar projects in the country's energy sector.
PGCB is responsible for operation, maintenance and development of the transmission system for the distribution of the electricity generated in the country.
The company is borrowing the fund mainly to construct the Barisal-Bhola-Borhanuddin 230kV double circuit power transmission line.
A part of the fund will also be used to finance other power sector projects, including a small power plant in Bhola, said Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister.