China Exim Bank Eyes Financing For Bangladesh Power Projects Including Payra Thermal Plant Expansion

💰 China Exim Bank has expressed interest in financing Bangladesh''s power sector projects, including the expansion of the Payra thermal power plant and upgrades to the power grid and distribution networks. A delegation led by the bank''s President Wang Chunying met Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood at the Bangladesh Secretariat on 15 October 2026 to discuss financing for ongoing and future power sector projects.

📊 The meeting focused on the Payra Thermal Power Plant Project, the Power Grid Network Strengthening Project under the government-to-government (G2G) arrangement, and the Expansion and Strengthening of Power Network under the Dhaka Power Distribution Company (DPDC) area. During the meeting, the power minister underscored the importance of a stable power and energy supply for national development and economic growth. He urged the bank to expedite financing for the projects.

🏛 Payra Thermal Power Plant

The Payra Thermal Power Plant is one of Bangladesh''s largest coal-fired power plants, located in Patuakhali district in southern Bangladesh. The plant is a joint venture between Bangladesh and China, with significant Chinese financing and engineering involvement. The plant''s expansion would increase its generation capacity, helping to meet Bangladesh''s growing electricity demand and reduce the country''s reliance on more expensive liquid fuel-based power generation.

Discussions covered the Payra Thermal Power Plant, power grid strengthening under the G2G arrangement, and network expansion in DPDC areas. The focus on both generation (Payra plant) and transmission/distribution (grid strengthening, DPDC network) reflects a holistic approach to power sector development — recognising that reliable electricity supply requires investment across the entire power value chain, from generation through transmission to distribution.

👥 China-Bangladesh power sector cooperation

China has been a major partner in Bangladesh''s power sector development over the past decade. Chinese companies and financing have supported several major power projects, including the Payra Thermal Power Plant, the Rampal coal-fired power plant, and various transmission and distribution projects. China Exim Bank has been one of the key financing institutions supporting these projects, providing concessional and commercial loans for power sector investments.

The ongoing engagement with China Exim Bank reflects the continued importance of Chinese financing for Bangladesh''s power sector development. While Bangladesh has been diversifying its sources of external financing — including through IMF, World Bank, ADB, JICA, and recently proposed sovereign bonds — Chinese financing remains a critical source of capital for large infrastructure projects that other lenders may be reluctant to support.

🌏 Power sector context

Bangladesh''s power sector has undergone significant expansion over the past decade, with installed generation capacity reaching 32,688 MW (as of 15 September 2026, including captive and renewable power). However, actual peak generation has been much lower — reaching 17,201 MW on 20 May 2026. The gap between installed capacity and actual generation reflects several challenges, including fuel supply constraints (particularly natural gas shortages), transmission and distribution bottlenecks, and the financial weakness of power sector utilities.

The country''s broader energy security situation has been complicated by the Middle East conflict, which has disrupted LNG supplies from QatarEnergy and elevated international oil prices. The combination of fuel supply challenges and elevated international fuel prices has put significant pressure on the power sector — making investments in domestic generation capacity, transmission infrastructure, and distribution efficiency even more critical.

💰 Looking ahead

For Bangladesh, the China Exim Bank''s interest in financing power sector projects represents a positive signal for the country''s energy security agenda. The coming months will show whether the discussions translate into concrete financing commitments — and whether the projects are implemented in a way that delivers the expected improvements in power sector performance.

For Bangladesh''s broader development financing strategy, the continued engagement with China Exim Bank demonstrates the country''s ability to attract external financing from multiple sources. By diversifying its sources of external financing — including IMF, World Bank, ADB, JICA, China Exim Bank, and international capital markets — Bangladesh can ensure that it has access to the capital needed to finance its ambitious development agenda.