Bangladesh Bank has authorised the release of approximately $3.2 million to open a Letter of Credit (LC) for SS Power-I Limited, a power plant owned by the controversial S Alam Group, in an effort to address the ongoing energy crisis.
Arif Hossain Khan, spokesperson for the central bank, said on Thursday that the country’s electricity crisis has intensified severely. Under these circumstances, keeping a power plant idle would be detrimental to the state, and the approval was therefore granted in the national interest.
According to data from central bank, S Alam Group has accumulated liabilities exceeding Tk2,25,000 crore under various direct and indirect names, the major portion of which consists of non-performing (defaulted) loans.
Under existing regulations, defaulting organisations are strictly barred from accessing new credit facilities or opening LCs from banks.
SS Power-I Limited is a 1,320 MW coal-fired power plant constructed in Gandamara area of Banshkhali, Chattogram, under a joint venture between S Alam Group and two Chinese firms.
The plant comprises two units, each with a capacity of 660 MW, and has been commercially generating electricity and supplying it to the national grid since September 2023.
Sources reveal that S Alam Group holds a 70 per cent stake in SS Power-I Limited, while the remaining 30 per cent is owned by China’s SEPCO III (Sepco Three) and HTG Development Group.
A circular issued on Wednesday by the Banking Regulation and Policy Department of Bangladesh Bank confirmed the approval to release the remaining $3,197,561 of a syndicated foreign currency loan previously approved by Rupali Bank in favour of SS Power-I Limited, alongside authorisation to open new LCs.
The official circular, signed by Bangladesh Bank Deputy Governor Md Kabir Ahammad, mentioned that under the powers conferred by Section 121 of the Bank Company Act, 1991, the provisions of Section 27 of the same Act will be waived for Rupali Bank regarding the release of this loan and the opening of LCs in favour of SS Power-I Limited.
However, the central bank has imposed a strict condition in the circular, specifying that no financial liability will be created for Bangladesh Bank under this credit facility.
Moreover, Rupali Bank will not be permitted to claim any financial assistance from the central bank for this transaction in the future.
Central bank officials explained that the power plant is currently operational and actively supplying electricity to the national grid.
They warned that any shortage of raw materials could halt generation. To ensure uninterrupted electricity production, SS Power-I Limited was permitted to open LCs despite its defaulted status.
Officials claimed that similar exemptions have previously been granted to several companies to protect employment and production, and this facility has been extended under the same rationale.
