The news that World Bank (WB) will lend money direct to National Credit and Commercial Bank Ltd (NCC Bank Ltd), Dhaka, in order to finance power projects in Bangladesh grabbed significant attention of the financial world. This is because, normally WB lends money to governments but this time the Bank has made an exception. For the first time ever, the recipient is a Private Commercial Bank (PCB). "The probable reasons may be WB wants to promote private sector entrepreneurs in infrastructure development of the country," says Gazi Hassan Mahmood, Vice President of. NCC Bank Ltd. "Transparency, accountability, effectiveness & efficiency in fund management by private organizations like the Banks have inspired WB. Besides, the recipients will have quick and better access to the fund due to the absence of bureaucratic complexities. There is the certainty of repayment and fulfillment of objectives of this specific fund."

The loan amount to be lent to NCC Bank is Tk 193.2 crore, which will be used to finance three power plant projects of the Doreen Power Generation Company Limited; each plant will generate 23 megawatt of power. The aggregated production capacity will be 66 megawatt. The plants are expected to go into operation by November 2008.

The total cost of the project is Tk 345 crore, 56% (Tk 193.2 crore) of which will be provided by the World Bank through NCC, while NCC Bank itself will provide Tk. 48.3 (14%) and the rest Tk 103.5 crore (30 %) will come from equity partners. WB's interest rate for the loan will be 9% and NCC will lend the money at the rate of 11%. Mahmood further informs ET that, among the PCBs, NCC Bank qualified for receiving, utilizing and managing WB fund effectively and that Bangladesh Bank mediated in the loan process under its Investment Promotion Financing Facility (IPFF) program. "The loan will be processed by applying standard practice. Guidelines for Operating Directives for IPFF Fund will be strictly followed."

Mahmood welcomes foreign investment in building power plants. "If foreigners/ expatriates want to invest in the power plant project and can fulfill the conditions stipulated by the Central Bank and other relevant authorities, NCC Bank will be eager to finance them."