The project will further ease access to energy in the country, the regional lender says
The Asian Development Bank (ADB) will provide a $200 million financing package to the Reliance Bangladesh LNG and Power Ltd (RBLPL) to build and operate a 718MW combined-cycle gas-fired power plant in Bangladesh.
An agreement to this end was signed between Reliance Bangladesh LNG and the ADB on Thursday.
Shantanu Chakraborty, director of Infrastructure Finance, South Asia, Central Asia, and West Asia in ADB’s Private Sector Operations Department, and Ranjan Lohar, CEO of Reliance Bangladesh LNG, signed the agreement on behalf of their respective organizations.
The project will ease energy shortage and drive private sector investment further in the power sector of Bangladesh, the regional lender said.
As per the agreement, the assistance comprises a $100 million loan from the ADB, and another $100 million loan from the Leading Asia’s Private Infrastructure Fund (LEAP), which will be administered by the ADB.
The project is co-financed by the Japan Bank for International Cooperation as well as four commercial banks, with insurance for the commercial banks provided by Nippon Export and Investment Insurance.
“This highly energy-efficient project will help address a widening gap between the demand and supply of electricity in Bangladesh, which is critical for continued industrial and economic growth,” said Shantanu Chakraborty, the ADB official.
“ADB has been instrumental in mobilizing crucial commercial financing, incorporating best practices in environmental and social standards, and establishing precedents for future financings of similar large-scale projects in Bangladesh by boosting investor and lender confidence.”
Despite a significant increase in installed generation capacity in Bangladesh’s power sector over the past decade, demand for electricity is not yet fully met through domestic supply.
To help close the gap, the government continues to emphasize greater private sector investments in power generation.
The plant will be located on the banks of the Meghna River, southeast of Dhaka. It will boost national generation capacity by about 4%, reducing the need for electricity imports and the use of environmentally harmful and expensive fuels like coal and oil.
ADB has been involved in this project as a leading anchor lender since the early stages of its development.
LEAP was established in 2016 with a $1.5 billion capital commitment from the Japan International Cooperation Agency (Jica).
It is focused on delivering high quality and sustainable private sector infrastructure projects that reduce carbon emissions, improve energy efficiency, and offer accessible and affordable health care, education, and communication services to ADB’s developing member countries.