Reliance Power Limited, India's leading private sector power generation company, has got the debt financing and partial risk guarantees totaling $583 million from Asian Development Bank (ADB) to develop Liquefied Natural Gas (LNG) and gas-fired power project in Bangladesh.
The project, which includes a power generation facility to be located at Meghnaghat near the capital city of Dhaka, and an LNG terminal, near Kutubdia Island, south of Chittagong, will significantly increase power generation and improve energy infrastructure in Bangladesh.
The total project cost is approximately $1billion.
"ADB's leadership in financing will help us develop this clean and reliable LNG-based power project in Bangladesh," Venugopala Rao, CEO of Reliance Power, said.
Reliance Power has achieved a major and important milestone of approval of financing for its landmark project in Bangladesh. This is an important step in helping Bangladesh achieve energy security," Venugopala Rao added.
Reliance Power plans to increase its power generation capacity to around 3,000 MW in Bangladesh. Energy from the power plant will be sold into the country's electricity grid under a long-term power purchase agreement with Bangladesh Power Development Board.
ADB's financing package includes loans and partial risk guarantees for the power generation facility as well as for the LNG terminal.
"ADB's partnership with Reliance Power will help Bangladesh scale up its energy infrastructure to sustain and support the country's economic growth," Michael Barrow, Director General of ADB's Private Sector Operations Department, was quoted as saying in a statement on Tuesday.
"ADB's role as a direct lender and guarantee provider will enable Reliance Power to mobilise much needed long-term debt financing and help attract new lenders to Bangladesh." Diversifying Bangladesh's sources of energy is critical for the country as demands for natural gas have placed significant pressures on the country's domestic gas reserves.
New LNG import facilities will enable the country's existing gas-dependent infrastructure to remain viable while opening the country to access natural gas from global markets, said the ADB.
