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Anil Ambani-promoted Reliance Power on Tuesday said the Asian Development Bank’s (ADB's) board of directors had approved debt financing and partial risk guarantees totalling $583 million to develop the company's Liquified Natural Gas (LNG) terminal and 750-Mw power project in Bangladesh.
The project, which includes a power-generation facility to be located in Meghnaghat, near the capital city of Dhaka, and an LNG Terminal near Kutubdia Island south of Chittagong, will significantly increase power generation and improve energy infrastructure in Bangladesh, said the company in a statement.
ADB’s financing package includes loans and partial risk guarantees for the power generation facility, as well as for the LNG terminal. The total project cost is approximately $1 billion.
“ADB’s partnership with Reliance Power will help Bangladesh scale up its energy infrastructure to sustain and support the country’s economic growth.” Michael Barrow, director-general of ADB’s Private Sector Operations Department, said: “ADB’s role as a direct lender and guarantee provider will enable Reliance Power to mobilize much needed long-term debt financing and will help in attracting new lenders to Bangladesh.”
Diversifying Bangladesh’s sources of energy is critical for the country as demands for natural gas have placed significant pressures on the country’s domestic gas reserves. New LNG import facilities will enable the existing gas-department infrastructure to remain viable while opening Bangladesh's access natural gas from global markets.
ADB’s support will help Reliance Power to develop an initial approximately 750 megawatts (MW) of gross power generation capacity and terminal facilities for LNG import. Reliance Power plans to increase its power generation capacity to around 3000 MW in Bangladesh. Energy from the power plant will be sold to the country’s electricity grid under a long-term power purchase agreement with the Bangladesh Power Development Board.
“Reliance Power has achieved a major and important milestone of approval of financing for its landmark Project in Bangladesh. This is an important step in helping Bangladesh to achieve energy security,” said Venugopala Rao, CEO, Reliance Power. “ADB’s leadership in financing will help us to develop this clean and reliable LNG –based power project in Bangladesh.”