Reliance Group of India has signed agreements to set up a 718MW gas-based combined cycle power plant in Meghna ghat over the next three years.
Reliance Bangladesh LNG and Power Limited, a special purpose vehicle (SPV) company of the Indian conglomerate, signed four contracts on Sunday with different entities of the government to implement the project after four years into the initial deal.
Under the agreements, the government will purchase electricity from the project for a 22-year period at a levelled tariff rate of 7.3123US cents per kilowatt hour (equivalent to Tk5.85 each unit) with 82% plant factor and 12% discount factor.
The Reliance will use imported re-gasified liquefied natural gas (R-LNG) for its proposed plant which will be supplied by state-owned Petrobangla at a rate of $7.2625 per mmbut. In the contract, the US dollar rate was calculated at Tk80, sources added.
The government will have to spend Tk80,945 crore (about $8 billion) over the 22-year period for buying electricity from the plant.
Addressing the contract signing ceremony, Prime Minister’s Adviser Dr Tawfiq-e-Elahi Chowdhury said the signing of the final deals for the project took a long time of four years because of its complex nature.
“Now we hope the Reliance will implement the project in a short time,” he said.
The function was also addressed by Indian High Commissioner in Dhaka Riva Ganguly Das, Prime Minister’s Principal Coordinator on SDG Affairs Abul Kalam Azad, Senior Secretary of Power Division Dr Ahmad Kaikaus, Energy Secretary Abu Hena Md Rahmatul Munim, and Bangladesh Power Development Board (BPDB) Chairman Khaled Mahmood.
Of the four agreements, the Power Division signed the implementation agreement while state-owned Bangladesh Power Development Board (BPDB) inked the power purchase agreement (PPA) and land lease agreement (LLA), and state-owned Petrobangla signed the gas supply agreement (GSA).
According to an official of Reliance Group, Dhaka office, the company will require $750 million to implement the project which will be arranged from different international financers within 6 to 9 months.
The Power Division officials said it has been more than four years since Indian Reliance Group signed a Memorandum of Understanding (MoU) for making an investment worth $3 billion in the power and energy sector of Bangladesh.
But over the period, the Indian conglomerate had not been able to roll out the investment as it could not sign any final deal with the government due to disputes on different issues with different government agencies.
Power Division officials said Reliance signed the MoU during Indian Prime Minister Narendra Modi’s Dhaka visit in early June, 2015 announcing its plan to set up a 3000MW gas-fired power plant and a 500mmcfd LNG terminal in Bangladesh.
The import of liquefied natural gas (LNG), use of the required gas at the power plant and also selling of the remaining portion of the imported gas to Bangladesh government were parts of Reliance’s initial plan.
“But, frequent changes in its proposal and mismatch with the government’s terms and conditions put Reliance in back foot in pushing forward its project in Bangladesh,” said a top official at the Power and Energy Ministry.
The latest proposal got approval from the Cabinet Committee on Public Purchase on May 24, 2017.
