NEW DELHI: Anil Ambani-led Reliance Power on Tuesday announced that it has agreed to set up a 750 MW gas-based power plant in Bangladesh in a joint venture with Japanese power utilities giant JERA. Located in Meghnaghat, 51 per cent of the facility will be owned by Reliance Power, with the rest held by JERA.
“The project will be set up within 36 months,” Reliance Power said. While the Anil Dhirubhai Ambani Group (ADAG) did not disclose any information regarding the investment going into the project, reports say that the group might shell out close to $1 billion for the project which the company touts as the biggest Foreign Direct Investment (FDI) in Bangladesh.
“This joint venture project will give a tremendous boost to the economic and industrial growth of Bangladesh and will enhance the energy security of the country with clean, green and reliable LNG based power,” chairman Anil Ambani said in a statement.
The companies had signed relevant project agreements with the Bangladesh government on Sunday for the first phase of the project. These include the Power Purchase Agreement and Land Lease Agreement with the Bangladesh Power Development Board, a Gas Supply Agreement with Titas Gas, a subsidiary of Petrobangla, and the Implementation Agreement with Bangladesh’s Ministry of Power, Energy and Mineral Resources.
The government of Bangladesh has reportedly agreed to buy over 700 MW of electricity over the next 2 years.
According to Reliance Power, it will relocate one module of equipment procured for its combined cycle power project at Samalkot in Andhra Pradesh and route it for use in the first phase of the Bangladesh project. “The transaction will result in Rs 835 crore ($116 million) debt reduction for Reliance Power, payable to US-Exim,” the company said.
Reliance Power’s partner in the project, JERA, has investments in 26 power projects in Japan with 67 GW of generating capacity, and nearly 10 GW of generating capacity overseas (including projects under development).