Bank Asia, a local private commercial bank, is going to arrange the largest ever syndicated loan in the country’s history amounting to Tk 63.95 billion for Bashundhara Group.
For other interested partners a letter has already been issued to 20 banks by the lead financer Bank Asia. State owned Agrani Bank and Bangladesh Infrastructure Finance Fund Limited (BIFFL) have already joined as co financers.
The loan is going to be arranged for Bashundhara Oil and Gas Company Limited (BOGCL), a sister concern of the group, which will produce refined LPG, diesel, gasoline, furnace oil, Jet fuel and sulphur from crude oil. Construction work of BOGCL is likely to start in 2018 and complete in 2021.
The project cost has been estimated at Tk99.84 billion of which Tk35.89 billion would be in the form of equity financing. The BOGCL plans to go into operation in 2022 and its facility is planned to be built on a 220 acre plot in Banshbari of Shitakundo under Chittagong, Managing Director Arfan Ali of the Bank Asia said.
He said, “This is the first time in the history of private sector investments in oil refinery project and it’s our pleasure to be the lead financer of the project.”
As per the project profile the BOGCL will also build a jetty in the port area for importing crude oil and it expects after the company begins operation it would produce 150 metric tonnes (MT) of LPG, 8,108 MT diesel, 1,000 MT gasoline, 2,664 MT furnace oil, 1,205 MT jet fuel and 96 MT sulphur every day.
The BOGCL is likely to sell its products to Bangladesh Petroleum Corporation and the power generating companies against a demand for 6.25 million MT refined oil in the country. Currently only 2.19 million MT are being supplied and it is likely to increase to 11 million MT in the next five years.
Even though the frequency of large syndicated loans haven’t increased in recent months but the syndicated loan for the BOGCL may encourage other banks and entrepreneurs for setting up large industries in the private sector.