The Beximco Group, a stock market listed company dealing in textiles, informed its investors about the issuance of the bonds via an announcement on Wednesday.
Reportedly, Teesta Solar Limited and Korotoa Solar Limited, two subsidiaries of Beximco Power Company Ltd, will install the solar PV power projects, totaling 200 MW and 30 MW, respectively, alongside Chinese partners, TBEA Xinjiang Sunoasis Co. Limited and Jiangsu Zhongtian Technology Co. Limited.
Islamic banks and financial institutions from Dubai, Malaysia and Bangladesh are expected to subscribe to the $400 million bond. A portion of the funds will also be used to expand the group’s textile division, Beximco said.
“When we sought funding from Islamic banks in Dubai and Malaysia for solar power plants. They said they can only invest if Islamic shariah complaint bond is launched,” a Beximco official said. With the Sukuk bond, he said both shariah compliant and traditional banks, and financial institutions may invest.
Company officials added that all the work, except from importing equipment for the solar power projects, has already been completed. The plants are expected to start operation later this year.
In Bangladesh, low-cost financing is available from the government, in addition to donor sponsored funds, for setting up small scale solar power projects. However, for large scale projects, project developers must depend on banks to obtain financing. As such, the roll out of many large scale solar power plants has stalled in Bangladesh, because they have failed to secure the required funds and land.
In response, the government has long been trying to develop its stock market, and particularly its bond market, to lower dependence on the banking system for such large scale projects.
To date, the country has installed 750 MW of renewable electricity plants, and a number more are under construction. The government has also planned aggressive efforts to raise power generation from renewables during the 2021-2025 period, with a target of 30 GW by 2041.
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