After four years into the initial deal, Reliance Group of India on Sunday signed agreements to set up a 718 MW gas-based combined cycle power plant in Meghnaghat over the next three years.
Reliance Bangladesh LNG and Power Limited, a special purpose vehicle (SPV) company of the Indian conglomerate, signed a total of four contracts with different entities of the government to implement the project.
Under the agreements, the government will purchase electricity from the project for a 22-year period at a levelised tariff rate of 7.3123 US cents per kilowatt hour (equivalent to Tk 5.85 esch unit) with 82 percent plant factor and 12 percent 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 to be Tk 80, sources added.
Officials said the government will have to spend a total of Tk 80,945 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 longer time of four years because of its complex nature. “But now we hope the Reliance will implement the project in a shorter time,” he said.
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 officials said, 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).
An official of Reliance Group’s Dhaka office informed that the company will require $750 million to implement the project which will be arranged from different international financers within 6-9 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 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 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.