ADB to finance $121.55m for private solar plant in Pabna

The Asian Development Bank (ADB) has signed a $121.55 million financing package with Dynamic Sun Energy Private Limited to build and operate a 100-megawatt (MW) grid-connected solar photovoltaic power plant in Pabna.

The plant is the country's first private-sector utility-scale solar facility to secure support from global financiers, said the lending agency in a press statement on Monday.

ADB arranged, structured, and syndicated the debt package as the sole mandated lead arranger and book runner, it read.

The financing package comprises a $46.75 million loan from ADB, a syndicated B-loan of $28.05 million from ILX Fund I, an Amsterdam-based emerging market private credit fund focused on supporting the Sustainable Development Goals with ADB as lender of record and a syndicated parallel loan of $46.75 million from the Japan International Cooperation Agency. 

"As Asia's climate bank, ADB welcomes the opportunity to support renewable energy in Bangladesh, where obtaining long-term financing for such projects is a challenge," said ADB Private Sector Operations Department Director General Suzanne Gaboury.

"This partnership exemplifies our lead role in mobilising financing for clean energy facilities and stimulating further investment in sectors where it's needed the most," he added.

The solar power plant will generate 193.5 gigawatt-hours of electricity annually and avoid 93,654 tonnes of carbon dioxide emissions annually.

The company responsible for the construction and operation of the plant, Dynamic Sun Energy, is owned by Paramount Textile PLC (PT), one of the largest woven textile manufacturers in Bangladesh, which also operates several power plants.

"We are delighted to secure financing for one of the largest private sector solar projects in Bangladesh to date, with the support of international lenders led by ADB," said PT Managing Director Shakhawat Hossain, "Partnering with an internationally reputable financial institution such as ADB affirms PT's dedication to sustainability and marks a significant stride in our journey towards sustainable growth."

Currently, a total of 667 MW of solar power is being generated for the national grid through both government and private initiatives. However, the total renewable energy generation in the country, including off-grid (369.88 MW) and on-grid (835.22 MW), stands at 1205.11 MW.

The government has set a target of generating 10% of the total electricity from renewable sources by 2025. Several projects are currently underway in both the public and private sectors to achieve this goal.

"Our current goal is to generate 10,000 MW of electricity from renewable sources by 2030. Placing special emphasis on carbon emission reduction, we have set a target of generating 40% of electricity from clean energy by 2041," Power Cells Director General Mohammed Hossain told TBS.