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Bangladesh Power Development Board (BPDB) and China Huadian Hong Kong Company Ltd (CHDHK) have signed a joint venture agreement to construct a 1,320 MW coal-fired power plant in Maheshkhali, Cox's Bazar, a district in the south-east of Bangladesh. The estimated cost of the project is US$2 billion.
The companies have agreed to set up a joint venture within the month in which each party will hold an equal share. The joint venture will complete construction of the plant in 48 months.
The agreement follows a memorandum of understanding (MoU) to develop the project that the companies signed six years ago. The delay between the two has been attributed to unconducive legislation.
The project aims to transform Maheshkhali into an energy hub in the next three to four years.
It is part of the Bangladeshi government's shifting focus from short-term and mid-term projects to baseload projects, needed to meet the rising demand for electricity. At present, 20% of the population do not have access to electricity, with the country facing power shortages of between 1,000 and 1,500 MW a day.
The government is working to provide access to electricity to all of its more than 160 million citizens by 2021. In line with this objective, several other agreements to develop huge power projects have been signed in the past few months.
In February, BPDB signed an MoU with Indonesia's PT Pertamina regarding the development of a 1,400 MW combined cycle gas-fired power plant with floating, storage and regasification unit. The following month, MoUs were signed for a 2,400 MW nuclear power plant and a 2,400 MW gas-fired combine cycle power plant with an integrated LNG import terminal, as well as a Contract Framework Agreement for a 2,000 MW coal-fired power plant at the mouth of a proposed mine.
CHDHK is a wholly-owned subsidiary of China Huadian Corporation, a state-run power generation company of China. It invests in energy generation, coal resources development and power grid construction. This is the company's first investment in Bangladesh.