Reliance Power nears close on $750m LNG-to-power project deal
Reliance Power is expected to reach financial close on a $750 million loan over the coming months to finance its $1 billion integrated 750MW LNG power plant and offshore LNG terminal in Bangladesh. Financed on a debt to equity ratio of 75:25, the project is scheduled for construciton early next year and marks the first phase of a larger scheme comprising a 3,000MW power plant and a two million tons per annum (mtpa) LNG terminal complex.
The debt package will be split between two separate special purpose vehicles, Reliance Bangladesh LNG & Power and Reliance Bangladesh LNG Terminal (75% of the funds will be allocated to the former SPV, and 25% to the latter). The tenor on the power project debt is 18 years inclusive of a three-year grace period, while the terminal project will have a 12-year tenor with a two-year grace period.
Lead arranger ADB provided a $250 million direct loan and a partial risk guarantee on a $333 million commercial tranche put up by commercial lenders including KEB Hana, MUFG and Societe Generale. Other lenders on the deal include the Islamic Corporation for the Development of the Private Sector Bank which is putting up around $100 million and the Islamic Development Bank & Infrastructure Development Company of Bangladesh which will provide a $85 to 100 million commitment. Clifford Chance is acting as lenders' legal counsel.
Reliance Power has signed a 22-year PPA with state-owned offtaker Bangladesh Power Development Board (BPDB) which has agreed to purchase 718MW of electricity at a total cost of BDT 5.8498 ($0.07 cents) per unit. Reliance Infrastructure is the EPC contractor.
