Summit Group’s remarkable journey from a trading company to Bangladesh’s largest infrastructure conglomerate offers valuable insights for UAE investors considering opportunities in emerging markets. Under the leadership of founder and chairman Muhammed Aziz Khan, the company has developed a unique model that combines international financial standards with deep local market expertise.
In 2016, Muhammed Aziz Khan made a strategic decision that would transform Summit Group’s ability to attract foreign investment. By establishing Summit Power International in Singapore, Khan created a structure that could leverage Singapore’s financial markets and governance standards while maintaining operations in Bangladesh.
“I think we are the only company in Bangladesh that holds assets in Bangladesh but is incorporated in Singapore,” explains Ayesha Khan, Managing Director and CEO at Summit Power International. This unique structure has enabled Summit to access financing that would otherwise be unavailable to companies based solely in Bangladesh.
The results speak for themselves. Summit has secured partnerships with major international corporations, including General Electric and Japan’s Jera, which acquired a 22% stake in Summit Power International in 2019.
Wu Yan Bin, Chief Financial Officer at SPI, highlights the importance of this structure: “If SPI were to remain completely within Bangladesh, it would have been more challenging for Jera to obtain their approvals to invest directly into Bangladesh.”
The success of Summit Group stems from Muhammed Aziz Khan’s understanding of both local market needs and international investor expectations. “[I] found a niche and I wanted to do something else in life, but this niche came up and somehow I got embroiled into it and started the business,” Khan explains.
That niche was addressing Bangladesh’s critical infrastructure needs, particularly in the power sector. Khan recognized that while Bangladesh offered tremendous growth opportunities, international investors would require certain governance standards and financial safeguards.
By establishing Summit Power International in Singapore, the company gained credibility with international investors while maintaining its intimate knowledge of the Bangladeshi market. “We have the best of both worlds or we have been trying and working towards a strategy where we have the best of both worlds, the growth opportunities of Bangladesh, the close understanding of a Bangladeshi market by being company that is originally from Bangladesh, but also being an international multinational company,” Ayesha Khan notes in an interview.
This approach has allowed Summit to offer competitive electricity rates in Bangladesh while attracting foreign investment – a balance that many companies in emerging markets struggle to achieve.
Summit Group has established itself as the largest independent power producer in Bangladesh, with 18 power plants in operation or under development. The company operates 17% of Bangladesh’s total private installed electricity capacity and 7% of the country’s total installed capacity.
This impressive portfolio was built through a combination of technological innovation and strategic financial planning. Summit consistently adopts the latest technologies for its power plants, improving efficiency and reducing costs. “We think that we, we believe that we are again as the largest IPP. How we differentiate ourselves by being always on the you know, forefront of technology, at least in bringing into the country,” explains Wu Yan Bin, Chief Financial Officer at Summit Power International.
The company’s weighted average cost of capital is significantly lower than local competitors due to its access to international financing. This allows Summit to offer more competitive electricity rates while maintaining profitability – a win-win for consumers and investors alike.
For UAE investors looking at emerging markets, Summit Group’s model offers several key lessons. First, structuring investments to leverage international financial markets while maintaining local operations can significantly reduce capital costs. Second, adopting the latest technologies can provide a competitive edge in infrastructure development. Finally, understanding the unique needs and constraints of local markets is essential for long-term success.
As emerging markets continue to develop their infrastructure, the opportunities for UAE investors are substantial. By following Summit Group’s example of combining international standards with local expertise, these investors can help address critical infrastructure needs while generating attractive returns.
