Bangladesh Bank has allowed SS Power-1 Limited, a power plant owned by the S Alam Group, to open import letters of credit (LCs) through state-owned Rupali Bank with a 100% cash margin.

The central bank issued two separate directives on Sunday, August 16, allowing Rupali Bank to open import LCs in favour of SS Power-1 against full cash margins. All scheduled banks were instructed to follow the relevant provisions.

In another directive, Bangladesh Bank said a provision under Section 27(Ka)(3) of the Bank Company Act, 1991, concerning the opening of import LCs, would remain inoperative until December 31, 2027.

However, the central bank attached a key condition to the facility. Bangladesh Bank will bear no liability against the credit facility, and Rupali Bank will not be allowed to seek any financial support from the central bank in the future for providing the facility.

SS Power-1 operates a 1,320-megawatt coal-fired thermal power plant at Gandamara in Banshkhali, Chattogram. The plant was built at an estimated cost of around $2.6 billion, or more than Tk 28,000 crore.

S Alam Group holds a 70% stake in the project, while Chinese companies SEPCO III and HTG jointly own the remaining 30%.

The plant consists of two 660MW units. The first unit began trial power generation on May 24, 2022, followed by the second unit on June 28 of the same year.

The power plant was officially connected to the national grid on January 14, 2023, with both units having a combined generation capacity of 1,320MW.