It has almost been four years since Reliance signed an MoU for investing $3 billion in Bangladesh's power and energy sectors
The final deal with the Indian Reliance Group is going to be signed for its proposed LNG-based 750 MW power plant as the Power Division has recently received clearance from the ministries of Law and Finance for the agreement, official sources said.
Officials said it has almost been four years since Reliance signed a memorandum of understanding (MoU) for investing $3 billion in the power and energy sectors of Bangladesh.
Four years down the line, Reliance is yet to roll out the investment as it could not sign any final deal with the government.
"The Ministry of Law and the National Board of Revenue [NBR] raised some issues over the insurance of the project while vetting it. But the Reliance Group is yet to agree with those issues," a senior official at the Power Division told UNB.
"Those issues were delaying the signing of the final agreement with the government for the project," he said adding that he thinks "things will move on soon once Reliance agrees with the issue".
The official hoped that the final deal will be signed within a month or two once the pending issues are resolved.
He mentioned that the Power Development Board (PDB) and the Power Division have already approved the proposed deal and then it was sent to the Law Ministry and NBR for vetting.
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 3000 MW gas-fired power plant and a 500 mmcfd 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 all parts of Reliance's initial plan.
"But, frequent changes in its proposal and mismatch with the government's terms and conditions has put the Reliance in back foot in pushing forward its project in Bangladesh," said a top official at the Power and Energy Ministry.
State Minister for Power and Energy Nasrul Hamid also mentioned that Reliance has changed its proposal four times.
After a number of changes in its proposal, the officials said, the Indian conglomerate has finally agreed to set up a 750 MW gas-fired power plant in Meghnaghat near Narayanganj, instead of the 3,000 MW plant. The government has agreed to supply gas to run the power plant.
The latest proposal was approved by the Cabinet Committee on Public Purchase on May 24, 2017 under which the state-owned PDB will import electricity from the Reliance plant at Tk5.85 per kilowatt hour (unit cost) for the next 22 years.
The government will have to spend a total of Tk80,945 crore (about $8 billion) over the 22-year period for buying electricity from the plant, the officials added.