POST TIME: 16 February, 2019 10:01:05 AM
Final deal with Reliance Group for power plant likely soon
UNB, Dhaka

Final deal with Reliance Group for power plant likely soon

The final deal with Indian Reliance Group is finally going to be signed for its proposed LNG-based 750 MW power plant as the Power Division has recently received clearance from the ministries of Law and Finance for the agreement, official sources said.

Officials said it has almost been four years since Indian Reliance Group signed a Memorandum of Understanding (MoU) for making an investment worth $3 billion in power and energy sector of Bangladesh.

Four years down the line, Reliance is yet to roll out the investment as it could not sign any final deal with the government.

“The Ministry of Law and the National Board of Revenue (NBR) raised some issues over the insurance of the project while giving their vetting. But the Reliance Group is yet to agree with those issues,” a senior official at the Power Division told the news agency.

“Those issues were delaying the signing of the final agreement with the government for the project,” he said adding, “We think things will move on soon once the Reliance agrees with the issue.”

The official hoped that the final deal will be signed within a month or two once the pending issues are resolved.

He mentioned that the Power Development Board and the Power Division have already approved the proposed deal and then it was sent to the Law Ministry and the NBR under the Finance Ministry for their vetting.

Power Division officials said Reliance signed the MoU during Indian Prime Minister Norendra Modi’s Dhaka visit in early June, 2015 announcing its plan to set up a 3000 MW gas-fired power plant and a 500 mmcfd LNG terminal in Bangladesh.

The import of liquefied natural gas (LNG), use of the required gas at the power plant and also selling of the remaining portion of the imported gas to Bangladesh government were all parts of Reliance’s initial plan.

“But, frequent changes in its proposal and mismatch with the government’s terms and conditions has put the Reliance in back foot in pushing forward its project in Bangladesh,” said a top official at the Power and Energy Ministry.

State Minister for Power and Energy Nasrul Hamid also mentioned that Reliance has changed its proposal four times.

After a number of changes in its proposal, the officials said, the Indian conglomerate has finally agreed to set up a 750 MW gas-fired power plant in Meghnaghat near Narayanganj instead of 3,000 MW plant. The government has agreed to supply gas to run the power plan.

The latest proposal got approval from the Cabinet Committee on Public Purchase on May 24, 2017 under which the state-owned Power Development Board (PDB) will import electricity from the Reliance plant at Tk 5.85 per kilowatt hour (unit cost) for the next 22 years.

The government will have to spend a total of Tk 80,945 crore (about $8 billion) over the 22-year period for buying electricity from the plant, the officials added.