BPC seeking $ 200m loan from foreign banks

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Finance

Saturday, 04 February 2012

Author / Source : UNB

Dhaka, Feb 3: Bangladesh Petroleum Corporation (BPC) is looking for Bangladesh Bank’s guarantee against its proposed bid to receive a US$ 200 million syndicated loan from three international banks to import petroleum.
The banks, operating globally, are Standard Chartered Bank, Citi Bank NA, and the HSBC. “We’ve sent a request to Bangladesh Bank about two weeks ago urging it to give a guarantee against our proposed loan of $ 200 million.  Now, we’re waiting for its guarantee,” said BPC chairman Abubakar Siddique.
The proposed loan will be taken for six months with 5.3 per cent interest rate.
Official sources said this will be the first syndicated loan from 3 international banks to the BPC, responsible for the import of petroleum and its marketing across the country.
The recent sharp rise in petroleum use for costly rental power plants has prompted the BPC to rush to the three banks as it experiences severe foreign currency shortage to pay in cash to its fuel oil suppliers.
Last year, the BPC imported about 4.8 million metric tonnes of petroleum to meet the domestic requirement.
But, the demand continues to go up by 1.9 million tonnes a year, putting a huge pressure on the BPC.
The demand has been rising with such a trend for the last two years following the government move to install many liquid fuel-based rental plants.
During the period, the government signed 45 contracts for new power plants of which two-thirds are liquid fuel-based ones.
BPC officials said the proposed loan of $ 200 million will not be good enough to meet the total hard currency requirement.
Besides, the BPC has already got assurance to get another $2 billion for the current calendar year from Islamic Trade and Finance Cooperation (ITFC), an autonomous entity of Islamic Development Bank (IDB), at an interest rate of 5 per cent.
The IDB provided a loan of $1.41 billion to the BPC at an interest rate of 5.30 last year, the BPC officials said.
The IDB provides loan for every Arabic year which BPC counts the date as per international calendar year.
Recently, the BPC has settled premium on diesel, octane, jet fuel that will be imported from Kuwait Petroleum Corporation (KPC), Middle East Oil Refinery (MIDDOR) of Egypt, Petronas Trading Corporation (Petco) of Malaysia, Philippines National Oil Company (PNOC) of Philippines.     UNB