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New Silk Road Finance Awards

South Asia: Best Chinese Bank in the Region for BRI 2019

Bank of China

Bank of China (BOC) has been at the forefront of BRI projects in south Asia, and a regional pioneer among mainland banks. Over the last three years, it has pitched for these awards several times, relying on its presence in a host of deals such as the 10-year, $700 million syndicated term loan raised for Pakistan’s finance ministry in December 2017. BOC was a key player in that deal, which secured partial guarantees from the World Bank.

This year it has shone across the region, arranging deals in Pakistan and Bangladesh – the latter sovereign a relative latecomer to the BRI party, despite being China’s third-largest regional trading partner. In December 2018, Bank of China secured a mandate as lead arranger, lender, swap bank and correspondent bank on a $1.78 billion syndicated loan to fund a coal-fired power station that will be built in Bangladesh by Chittagong-based S. Alam Group.

BOC is also acting as correspondent bank on a deal in which it is providing swap services to a project central to Bangladesh’s long-term ability to generate enough electricity to power the fast-growing nation.

That project is large and complex, and emblematic of China’s desire to both build and fund critical power and transport infrastructure in BRI countries. It is being funded by BOC and an array of other mainland lenders, including China Development Bank, and built by Sepco Electric Power Construction Corporation.

It marks the first time Sepco has invested in a greenfield power project outside China: the state-run engineering firm, based in the city of Jinan, will own a 30% stake in the new power plant, with the remainder controlled by the local conglomerate. Dhaka is providing financial guarantees on the power purchase agreement, which will run for 25 years.

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