Bangladesh yesterday took another leap towards addressing its energy shortage, signing two separate agreements involving $7.4 billion to generate 6,000 megawatts of electricity largely from liquefied natural gas. 

One of the deals involves the local Summit Group, Japan's Mitsubishi Corporation and the US's General Electric Company, and the other Bangladesh Power Development Board and GE Switzerland.

Summit, Mitsubishi and GE signed a preliminary agreement at an event held in the capital's Sonargaon hotel to invest $3 billion to establish five power plants, two LNG terminals and one oil terminal.

“This is one of the biggest investments in the private sector in Bangladesh,” said Nasrul Hamid, state minister for power, energy and mineral resources.

Summit will hold the majority stakes in the project, said Ayesha Aziz Khan, managing director of Summit Power International.

In the day's other deal, BPDB and GE Switzerland will establish a 3,600MW LNG-based combined cycle power plant in Moheshkhali, Cox's Bazar at an estimated cost of $4.4 billion.

The BPDB will hold 51 percent stakes, GE Switzerland 30 percent and the remaining 19 percent still up for grabs.

The four 600MW combined cycle power plants under Summit's deal will be powered by GE's flagship 9HA gas turbines.

The 9HA-class gas turbines entered the Guinness World Records last year for efficiency based on the amount of electricity generated from natural gas at the power plant in Bouchain, France, where it was first put into commercial operation in June last year.

The project also includes two units of onshore LNG terminal with a total capacity of 380,000 cubic metres, and an oil terminal with a 100,000-tonne capacity -- all to be located in Matarbari, Cox's Bazar.

The location of the 300MW heavy fuel-based power plant has not been finalised yet.

“The project will use the world's most efficient and environment-friendly technology and the LNG terminal will use cutting-edge technology so that there is no boil-off, utilising all the gas for electricity generation,” Muhammed Aziz Khan, chairman of Summit Group, said.

At present, more than 90 percent people have access to electricity, said Tawfiq-e-Elahi Chowdhury, energy adviser to the prime minister, at the event in Sonargaon hotel.

“Hopefully, all of the people in Bangladesh will come under electricity coverage by next year,” he added.

Speaking to The Daily Star after the event, Russell Stokes, president and chief executive of GE Power, said the Bangladesh market holds great potential for the company as one-third of the population of 160 million still do not have access to the electricity grid.

The country has an installed power generation capacity of 16,000MW and plans to raise it to 34,000MW by 2030.

“We are going to see that is done with the lowest cost of energy options,” he said, referring to LNG. 

Electrification and economic growth are well-connected, he said, adding that his company has delivered turbines before than the government's deadline, he added.

Tetsuji Nakagawa, senior vice-president of the infrastructure business division of Mitsubishi Corporation, said his company is impressed by the diligent efforts of the government in developing the country's infrastructure.

“The project will enable Bangladesh to achieve further growth,” he added.

Nakagawa, Muhammed Aziz Khan, chairman of Summit Group, and Stokes, signed the preliminary agreement on behalf of their respective sides.

At a separate event in Bidyut Bhaban, BPDB and GE Switzerland decided to form a joint venture company to implement the project.

The joint venture will carry out a feasibility study, develop 5,600 acres of land, construct and operate the power plant, and construct an LNG import terminal and infrastructure. The plant will have three units of 1,200 MW.

The estimated project cost includes $1.6 billion for land development and $2.8 billion for the power plant. The expected completion time is 36 months.

Khaled Mahmood, chairman of the BPDB, and Stokes signed the preliminary agreement on behalf of the respective parties.