Reliance Power, Adani in $4.5bn power play in Bangladesh

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NEW DELHI: Bangladesh on Saturday saw power play by leading Indian business houses on the sidelines of PM Narendra Modi’s visit, with Anil Ambani’s Reliance Power and Adani Power committing an estimated combined investment of $4.5 billion for setting up power stations in that country.

Reliance Power said it has signed a deal with Bangladesh Power Development Board for setting up a 3,000 mw liquid gas-fired plant and a floating terminal for importing gas in ships to power the unit at a total investment of $3 billion.

This would be the single-largest foreign investment for Bangladesh.

The floating terminal would be set up near the coastal city of Cox’s Bazar in Maheshkhali district, over 300 km from capital Dhaka. BPDB is to provide land at appropriate site.

Bangladesh produces about 7,000 mw and faces a daily shortfall of around 1,500 mw. A major chunk of power is produced by burning diesel and costs 15-16 cents per unit. Industry analysts said given the current economics of LNG (liquefied natural gas) price, Reliance Power would be able to supply electricity at sub-10 cents price.

Reliance Power would move the equipment it had imported from US gear-maker GE and other suppliers for setting up a 2,400 mw station at Samalkot in Andhra in India and add another 600-mw unit later.

The equipment was not installed in the absence of allocation of gas from Reliance Industries Ltd’s Andhra offshore field due to drastic fall in output. The equipment would be installed in Bangladesh with manufacturer’s guarantee.

A Reuters report from Dhaka said the Adani group also signed a deal for setting up a coal-fired plant in that country. Company executives in India were unable to provide any detail.

The Tata group had proposed a $3 billion investment to build a coal-fired power station in Bangladesh some 6-7 years back but scrapped the project citing inordinate delays by the government.

 State-run generation utility NTPC is in the process of building a power station at an investment of $1.2 billion in joint venture with BPDB. All these power projects are aimed at meeting future demand.
By 2021, demand for elctricty in Bangladesh is expected to touch 24,000 mwand 40,000 mw by 2030. The Bangladesh Vision 2010 document envisages developing 10,00 mw generation capacity. Bangladesh now sources 500 mw from India.