Reliance Power and JERA Co Inc, which are developing a new gas-fired power generation project in Bangladesh, have signed a loan agreement for full financing totalling 642 million dollars with a group of banks that includes the Japan Bank for International Cooperation (JBIC).
JERA is the largest power generation company in Japan. The project is to build, own and operate a 745-megawatt natural gas combined-cycle power project at Meghnaghat in Naranganj, about 40 km southeast of Dhaka.
The electricity generated will be sold under a long-term power purchase agreement with the Bangladesh Power Development Board for a period of 22 years from the start of commercial operation.
The project company agreed an engineering, procurement and construction contract with Samsung Construction and Trading Corporation earlier this month. With this loan agreement, all major contracts required for the development of the project have been completed.
Going forward, Reliance Power and JERA will focus on full-scale construction and work steadily towards achieving commercial operation in 2022.
"We are delighted to achieve financing tie-up for this landmark project, which is the largest foreign direct investment and the largest IPP in Bangladesh, with a consortium of banks led by JBIC," said Reliance Power Chairman l D Amb.
"It represents one of the largest funding tie-ups for a project in Bangladesh's power sector," he said in a statement on Friday.
JERA President Satoshi Onoda said the high growth in electricity demand is expected to accompany steady economic development in Bangladesh. "We aim to contribute to the country's economic expansion through our participation in power generation and infrastructure businesses, including this project."
( With inputs from ANI )