The 718 MW natural gas-fired combined cycle power plant project, operated by one of India’s biggest conglomerates Reliance Group, at Meghnaghat close to Dhaka has failed to get any significant progress during the past one year.
On September 2019, the Indian oil-to-telecom conglomerate signed four agreements with Bangladesh government to build, very own and operate the energy plant at Meghnaghat, lots of 40 km from Dhaka.
The agreement also set August 2022 as the deadline for the project.
However, even after greater than a year, the project has seen barely 9% progress, the official document accessed simply by UNB has revealed.
Officials of the Reliance Group have got attributed the project's poor progress to the Covid pandemic and consequent lockdown, but expressed assurance of completing the remaining 91% work in under two years.
"Because of Covid-19 lockdown, we had to suspend our work in March in compliance with the government's directive,” explained Ranjan Lohar, ceo of Reliance Bangladesh LNG and Vitality Limited (RBLPL), a particular purpose vehicle formed for execution of the project.
He, however, stated that the pilling job of the project has now resumed.
“Reliance also recently inked loan agreements with different financiers, including Asian Creation Bank, for the project appearing developed on the banks of the Meghna River,” he added.
According to the agreements, the financing agencies will provide US$642 million, which US$200 million should come from ADB, even while Japan Bank for International Cooperation will give US$265 million and Nippon Export and Investment the rest of the US$177 million.
Meanwhile, Reliance Power has also signed a jv arrangement with JERA, a Japanese strength business, settling the share ratio in 51% for its own and 49% for the foreign investor.
The company in addition has signed an agreement with General Electric (GE), which will supply major equipment to the project, and appointed Samsung C&T as its Engineering, Procurement, & Construction (EPC) contractor to build the gas-fired power plant.
According to deal, the Meghnaghat vitality plant will end up being powered by two GE 9F gas turbines, a single GE D11 steam turbine and three H53 generators.
A complete of four contracts were signed by Reliance Bangladesh with numerous entities of the federal government to implement the project.
Of the four agreements, officials said, the energy Division signed the implementation pact while state-owned Bangladesh Power Development Board inked the energy purchase agreement and land lease agreement and Petrobangla signed the gas supply agreement.
Under the agreements, the federal government will purchase energy from the project for a 22-year period for a price of 7.3123 US cents per kilowatt hour (equal to Tk 5.85 each unit) with 82% plant factor and 12% price reduction factor.
Reliance will use imported re-gasified liquefied gas (R-LNG) because of its proposed plant, which is supplied by state-owned Petrobangla for a price of USD 7.2625 per mmbtu. In the deal, the US dollar fee was calculated to get Tk 80, options said.
Officials said the government must spend a complete of Tk 80,945 crore (about US$8 billion) more than the 22-time period for buying energy from the plant.
Power Division officials stated that the Reliance Group signed a great MoU during Indian Primary Minister Narendra Modi’s Dhaka visit to get about US$3 billion found in the energy and energy sector in Bangladesh which also contains setting up of a 500 mmcfd LNG terminal.
On the other hand, the Indian conglomerate was not able to roll away the investment since it could not sign any final manage the government because of disputes on different problems with different official agencies.
The import of liquefied gas (LNG), use of the required gas at the power plant and in addition selling of the remaining part of the imported gas to Bangladesh government were elements of Reliance’s initial plan.
“But, frequent changes found in its proposal and mismatch with the government’s terms and conditions set Reliance about the backfoot found in pushing forward its project found in Bangladesh,” said a top official at the energy and Energy Ministry.