GuarantCo provided a guarantee to support a 15-year USD 13.5 million dual currency financing solution on behalf of Technaf Solartech Energy Limited (TSEL), the first and currently only operational utility-scale solar project in Bangladesh, developed by Joules Power Limited, a Bangladeshi developer.
The solar power plant located at Teknaf, Cox’s Bazar Bangladesh, has an installed capacity of 28MWDC / 20MWAC. The expected annual yield is 43,000 MWh and at peak production the plant supply will cover up to 80 percent of the present electricity demand of the entire Teknaf region.
The innovative financing structure resulted in TSEL winning the Finance Asia ‘Best Bangladesh Deal for 2018’.
Standard Chartered and local banks
USD 13.5 million (USD and Taka)
Total transaction amount
USD 25 million (USD and Taka)
GuarantCo provided an innovative financing structure which combined partial credit guarantee with a liquidity extension guarantee, thereby mitigating both payment default risk and liquidity risk for Standard Chartered. The liquidity extension guarantee allows TSEL to benefit from a 15-year tenor for its loan whilst also allowing SC to exit the transaction after 8 years (the typical maximum tenor in Bangladesh for infrastructure projects) should there be liquidity constraints.
This innovative structure allows long-term sustainable financing for infrastructure projects like TSEL, to be financed efficiently in both hard and local currencies and sets an important precedent for the banking market in Bangladesh.
GuarantCo also obtained a USD 107,000 grant from the Technical Assistance Facility (TAF) of PIDG to fund and undertake technical and health, safety, environmental and social (HSES) due diligence and prepare a comprehensive environmental social action plan under IFC Performance Standards by an internationally reputed independent advisor.
The project will have a significant transformational impact in Bangladesh as it will set the tone for increased contribution of renewables in the energy mix of the country as the country aspires to have 10% of national energy mix coming from renewable sources by 2020.
Around 136,500 people will benefit from an improved quality of service: approximately 170 people were employed during construction and 70 people are currently employed during operational phase.