Reliance Power, Adani Power sign MoUs to develop power plants in Bangladesh

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Reliance Power, Adani Power sign MoUs to develop power plants in Bangladesh

The Bangladesh Power Development Board (BPDB) has signed Memorandums of Understanding (MoUs) with Reliance Power to develop a 3,000 MW natural gas-based power plant and with Adani Power for a 1,600 MW coal-fired project.

Planned to ease Bangladesh's prolonged power crisis, the plants are expected to be operational 13 months after final agreements are reached. The BPDB has stated that discussions are already underway to settle the details of the projects.

Adani Power will set up two coal-fired plants with a combined capacity of 1,600 MW. The total investment cost of the project is currently estimated at US$1.5 billion.

Reliance Power will develop four units of Liquefied Natural Gas (LNG)-based combined cycle power plants with a total generating capacity of roughly 3,000 MW and a total investment cost of approximately US$3 billion.

The company is planning to install equipment procured for its failed Samalkot project, a 2,400 MW gas-based combined cycle endeavor in Andhra Pradesh (India) which failed due to a rapid decline in the gas output from the KG D6 fields. The equipment includes advanced class 9FA machines supplied by GE. Reliance Power expects to build the Samalkot plant anew once domestic gas supply stabilizes.

Under the terms of the MoU, the company will also develop a floating storage and re-gasification unit (FSRU)-based LNG terminal at Maheshkhali Island in the Coxs Bazar district of Bangladesh. This terminal will supply re-gasified LNG to the power plant.

The BPDB will provide the land for the project, expected to be able to supply 35% cheaper power compared to the diesel-based power price currently used extensively in Bangladesh.

With total electricity production at 7,000 MW, Bangladesh's demand far exceeds supply - with a daily deficit of up to 1,500 MW.

Bangladesh's foreign minister, Abul Hassan Mahmood Ali, announced on June 5th that the country is planning to more than double its electricity imports from India by 2017. This would bring the total up to 11,000 MW from the 5,000 MW currently being imported.

The country's finance minister has disclosed that spending on development needs such as power and transport will rise by approximately 40% in the next year, to a total of roughly US$3.4 billion.

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