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IFC plans to commit $170m to power producer in India

IFC is aiming to encourage international investment into the power sector in India by lending to SCL.

The International Financial Corporation (IFC), the investment arm of World Bank, is planning to lend up to $170 million to Indian independent power producer Summit Corporation Limited (SCL).

According to an IFC filing, the $170 million investment will be in the form of convertible loan from the entity’s own account. Another potential co-investor is a Singapore holding company to be established by the Khan Family.

The investment is expected to help SCL to add about 715 Megawatts of electricity-generating capacity to Bangladesh's national grid through four power projects in the next three years.

“This transaction will send a positive signal to other prospective developers and investors involved in the power sector in Bangladesh as it will demonstrate the ability for companies with assets predominantly based in Bangladesh to attract international capital,” IFC stated in the filing.

“The funding from this transaction will facilitate job creation at the various projects sites and at the corporate level in Dhaka,” IFC added.

There are more than 40 million people that do not have ready access to power in India. Power shortages lead to costly disruptions to industrial production, including in the manufacturing sector. Therefore, there is a need to for developers to fill the critical electricity demand-supply gap.

IFC had previously financed SCL’s Khulna Power Plant in 1999 and Bibiyana II Project in 2015.

SCL is a company incorporated in Bangladesh and owned by the Khan Family. The family owns one of the largest business groups in Bangladesh with interests across power, energy, trading, port operations, telecommunications and real estate.