Reliance Power, Adani to build 4,600 MW power capacity in Bangladesh

Indian power companies Reliance Power and Adani Power Limited today signed separate agreements to build power plants in Bangladesh to generate a total of 4,600 megawatts of electricity to ease the country's persistent power crisis.

The two groups signed separate memorandums of understanding with state-run Bangladesh Power Development Board (BPDB) today, as Prime Minister Narendra Modi began a two-day state visit.

Anil Ambani-led Reliance Power will invest $3 billion for setting up a 3,000 megawatt mega power plant and a 2 million tonne capacity floating LNG import terminal in Bangladesh, according to a memorandum of understanding (MoU) signed by Sameer Gupta, executive vice president of Reliance Power

Reliance Power will use the equipment it had contracted for its Samalkot project in Andhra Pradesh for setting up the power plant in Bangladesh and the plant is expected to be commissioned in three years from the date of signing power purchase agreement (PPA).

General Electric (GE), USA and the other global suppliers will provide equipment warranties for the project, the company said in a statement.

Reliance Power was forced to abandon the 2,400 MW gas-based power project at Samalkot in Andhra Pradesh as the allocated gas from Reliance Industries' KG-D6 block did not come through due to the drastic decline in production.

The equipment for the project has been procured and is ready with the company. Use of these brand new equipments will put the implementation of Bangladesh project on fast track.

"Reliance is proposing to utilise these brand new equipment from Samalkot project, including advanced class 9FA machines supplied by GE, for the proposed project at Bangladesh, under appropriate warranties from GE and the other equipment suppliers. This will help set up the project on a fast-track basis," it said.

Adani Power will set up two, coal-fired plants with a total capacity of 1,600 MW that will cost more than $1.5 billion.

Officials of the firms said it would take 13 months to complete construction of the plants after final agreements had been reached.

"Discussions are going on to settle the details of the plants," said Mohammad Saiful Islam, a director of BPDB.

Bangladesh produces 7,000 MW of electricity but demand far exceeds supply, with a daily deficit of up to 1,500 MW.

The government on Thursday unveiled a 2.95 trillion taka ($38 billion) budget for fiscal 2014-15, stepping up spending on key sectors to tackle power shortages that are crimping economic growth and deterring investment.

Spending on development needs such as power and transport will rise about 40 per cent from the current fiscal year to 263 billion taka ($3.4 billion), finance minister Abul Maal Abdul Muhith told parliament, while overall spending will increase 23 per cent in the year from 1 July.

Foreign minister Abul Hassan Mahmood Ali said on Friday that Bangladesh also planned to more than double its electricity imports from India to 11,000 MW by 2017 from 5,000 MW now.