Bangladesh Bank (BB) has granted special permission to SS Power-1 Limited, owned by the controversial S Alam Group, to open letters of credit (LCs).
State-owned Rupali Bank will be allowed to open LCs for the company against a 100 per cent cash margin.
The facility will remain in force until December 2027. The relevant directive was sent to all banks in the country on Sunday night.
According to a Bangladesh Bank circular, Rupali Bank has been authorised to open import LCs in favour of SS Power-1 Limited against a 100 per cent cash margin. The facility has been granted in consultation with the government under Section 121 of the Bank Company Act.
Bangladesh Bank officials said the power project is operational and supplying electricity to the national grid. A shortage of raw materials could force the plant to suspend generation. To ensure uninterrupted power generation, SS Power-1 has been allowed to open LCs despite being a loan defaulter.
Similar facilities have previously been extended to a number of companies in the interests of employment and continued production, they said.
The 1,320MW coal-fired power plant was built in the Gandamara area of Banshkhali in Chattogram as a joint venture between S Alam Group and two Chinese companies.
Each of the plant’s two units has a generation capacity of 660MW. The plant began commercial generation and started supplying electricity to the national grid in September 2023.
According to sources familiar with the matter, S Alam Group holds a 70 per cent stake in SS Power-1 Limited, while the remaining 30 per cent is owned by China’s SEPCO III and HTG Development Group.
According to Bangladesh Bank data, loans taken by various S Alam Group entities, both in their own names and through other entities, exceed Tk2.25 trillion. A large portion of these loans is in default.
Under existing rules, banks are not permitted to extend new credit facilities or open LCs in favour of loan-defaulter companies.