State-owned North-West Power Generation Company Limited (NWPGCL) has signed a non-binding Memorandum of Understanding (MoU) with Germany’s Siemens AG to build a 3,600MW re-gasification LNG-based combined cycle power plant in Patuakhali’s Payra.
It will be the largest power station in the country after the Rooppur Nuclear Power Plant, which is being built in Pabna with the aim to add 2,400MW of electricity to the national grid by 2024.
NWPGCL Managing Director (MD) AM Khurshedul Alam and Chief Executive Officer of Siemens Sunil Mathur signed the MoU on behalf of their respective sides at Bidyut Bhaban in Dhaka on Sunday.
According to the MoU, NWPGCL and Siemens will form a joint venture firm and implement the project. To set up the plant, both companies will have equal share in that joint venture.
The project will be implemented on a 20:80 equity:debt basis, meaning NWPGCL and Siemens will provide 20% of the total project cost and mobilise the remaining 80% from international sources.
Siemens will gather most of the international funding, making it the biggest investment in any country by the German company.
The project’s estimated cost is $2.8 billion (about Tk22,652 crore based on the current exchange rate), including the debt of $2.4 billion (about Tk19,416 crore) and equity $400 million (about Tk3,236 crore).
“We have opted to import LNG as the country is reeling from an acute gas crisis due to quickly depleting reserves. The 3,600MW power plant will have three units with electricity generation capacity of 1,200MW each,” NWPGCL MD Khurshedul told the Dhaka Tribune.
“We hope the plant will start generating electricity in June 2020. We have selected Patuakhali as the location because there is a maritime port here which will help brining in the LNG,” he said.
The plant will be built on the bank of the Rabnabad River near Payra maritime port.
The first unit of the plant with 1,200MW generation capacity is slated to go into operation in June 2020, the second one in December 2020 and the third in December 2021.
Prime Minister’s Energy Adviser Towfiq-E-Elahi Chowdhury, State Minister for Power, Energy and Mineral Resources Nasrul Hamid and Ambassador of the Federal Republic of Germany Thomas Prinz attended Sunday's MoU signing ceremony.
NWPGCL is also building a 1,320MW coal-fired power plant at Payra on 1,000 acres of land that has already been acquired. Now, 100 acres of that land will be required to build the LNG-based 3,600MW plant.
At present, the cost of electricity per unit produced by a gas-run plant is less than Tk2 while the cost per unit from a diesel or furnace oil-run plant is Tk14 to Tk18.
NWPGCL has already decided to build another 750MW-850MW re-gasification LNG combined cycle power plant in Khulna.
A joint venture company, the Coal Power Generation Company Bangladesh Limited and Japanese MITSUI has also decided to set up a similar 500MW-600MW plant at Matarbari in Cox’s Bazar.
So far, NWPGCL has implemented three power plants – two 225MW ones in Sirajganj and Khulna and a 360MW dual-fuel plant in Bheramara.