The government yesterday signed two memorandums of understanding with two Indian private power companies for generating 4,600 megawatt electricity, which is almost half of Bangladesh’s installed capacity.
The massive amount of power will be generated at two proposed power plants in Bangladesh for which no tenders have been floated.
This will be the first ever private ventures in Bangladesh’s power sector by Indian companies. In the past, only local private companies got similar chances.
The two unsolicited deals with Reliance Power Ltd and Adani Power Ltd were signed yesterday on the first day of Indian Prime Minister Narendra Modi’s two-day visit to Bangladesh.
They will set up separate liquefied natural gas (LNG)-based and coal-fired power plants. The combined value of the deals is $5.5bn; of this, Reliance will invest $3bn.
Usually, state-owned Power Development Board (PDB) awards contracts to private companies through competitive tenders under the Public Procurement Rules to purchase electricity for different tenures.
A power Division official said that the deals with the two Indian companies were inked under the Speedy Supply of Power and Energy (Special Provision) Act.
Under this act, the government has already signed agreements on setting up the country’s first LNG terminal, 10 gas wells are being drilled, and more than 25 quick rental power plants and two other independent plants are operating.
According to one of the MoUs, Reliance Power Ltd, a concern of the Reliance Group, will set up a floating storage and re-gasification unit (FSRU) and a 3,000MW re-gasified liquefied natural gas-based combined cycle power plant at any suitable location in Bangladesh.
This was signed with the Anil Ambani-controlled arm of the Reliance Group – India’s largest conglomerate that is split between the two sons of pioneering industrialist Dhirubhai Ambani.
The other MoU says that Adani Power Limited, a concern of Adani Group, will install a 1,600MW ultra super critical coal based power plant at Moheshkhali of Cox’s Bazar or any other suitable location.
The Indian companies will implement the two projects under the build-own-operate (BOO) scheme.
Bangladesh India Friendship Power Company Ltd, a 50-50 joint venture between PDB and Indian state-run National Thermal Power Corporation, is the first Indian investment in the power sector here.
Besides, Bangladesh started importing 500MW from the Indian grid in October 2013. The import of another 600MW from India’s Western and Eastern grid is also on the cards.
PDB, Bangladesh government’s lone power purchase agency, will soon begin negotiations with Reliance and Adani to buy electricity from their plants. After negotiations, there will be two final deals in which tariff and rates will be fixed.
M Zahirul Haque, secretary of PDB, Samir Kumar Gupta, vice-president of Reliance Power, and Vneet S Jaain, CEO of Adani Power, signed the MoUs on behalf of their respective sides at the Bidyut Bhaban in Dhaka yesterday.
Bangladesh’s State Minister for Power, Nasrul Hamid, witnessed the MoU signing as the chief guest. M Tazul Islam, chairman of the parliamentary watchdog on this ministry, M Abubakar Siddique, secretary of the Energy and Mineral Resources Division, Monowar Islam, secretary of the Power Division, were also present.
“Bangladesh is an energy hungry country. We need more power and energy to address our Vision 2021,” the state minister said.
Adani currently generates 11,000MW in India and abroad and Reliance produces about of 6,000MW in India.
