Reliance Power Limited and Jera Co., Inc. through their project company, are developing a new gas-fired power generation project in Bangladesh.
The project company has now signed a loan agreement for full financing totaling $642 million with a group of banks that includes the Japan Bank for International Cooperation (JBIC).
According to a Reliance Power filing with the exchanges, this project is to build, own, and operate a 745 MW (net output: 718 MW) natural gas combined-cycle power project in Meghnaghat, Naranganj, located approximately 40 km southeast of Dhaka.
The electricity generated will be sold under a long-term power purchase agreement with the Bangladesh Power Development Board (BPDB) for a period of 22 years from the start of commercial operation. Reliance Power and Jera have taken the initiative in promoting the project.
The project company agreed an EPC contract with Samsung C&T in July 2020. With this loan agreement, all major contracts required for the development of the Project have been completed. Going forward, Reliance Power and JERA will focus on full-scale construction and work steadily towards achieving commercial operation in 2022.
"We are delighted to achieve financing tie-up for this landmark project, which is the largest foreign direct investment and the largest IPP in Bangladesh, with a consortium of banks led by JBIC. It represents one of the largest funding tie-ups for a project in Bangladesh's Power Sector," said Anil D. Ambani, Chairman of Reliance Power.
"In Bangladesh, where the high growth in electricity demand is expected to accompany steady economic development, we aim to contribute to the country's economic expansion through our participation in power generation and infrastructure businesses, including this Project," said Satoshi Onoda, President of Jera.
While Reliance power holds 51 per cent, Jera holds the remaining 49 per cent equity in the project company, Reliance Bangladesh LNG and Power Limited. As per the power purchase agreement, it will sell to Bangladesh Power Development Board for 22 years with Government Guarantee.
As per the Gas Supply Agreement, it will purchase from Titas Gas Transmission and Distribution Company (Titas) for 22 years.
The commercial operation date planned is year 2022..