Deal inked for 750 MW power project

Reliance Powers has signed a partnership agreement with JERA, one of the largest power utilities of Japan, for jointly setting up 750-megawatt gas-based combined cycle power project at Meghnaghat in Bangladesh.

Reliance Power will hold 51 per cent stake while JERA will hold 49 per cent stake in the joint venture company, said the Indian company in a statement yesterday.

The project agreements for the Phase-1 were signed with the authorities in Bangladesh on Sunday.

Reliance Power, the power generation company of Reliance Group, had signed a memorandum of understanding during the visit of Narendra Modi, prime minister of India at Dhaka in June 2015, for setting up  3,000  MW gas-based  combined  cycle  power project  in  phases  in Bangladesh.

The project  agreements  include  the  power  purchase  agreement  and  land lease agreement with BPDB for the power project, gas supply agreement with Titas Gas, a subsidiary of Petrobangla for the supply of gas to the power project, and  implementation  agreement  with  ministry  of  power,  energy  and  mineral resources.   The   project will   be   set   up within   36 months   of   signing   the agreements.

In the statement, Anil  D  Ambani,  chairman of Reliance  Group  of  Companies, said,  “This joint venture project  will  give  a  tremendous  boost  to  the  economic  and  industrial growth  of  Bangladesh  and  will  enhance  the  energy  security  of  the  country  with clean,  green  and  reliable  LNG -based  power. “

“We are excited to be part of the growth story of Bangladesh in partnership with JERA.”

Satoshi Onoda, president of JERA, said, “It is our great honour to participate in the largest IPP [independent power producer] Bangladesh. Together with Reliance Power, a leading private power company in India, JERA will realise a stable power supply and contribute to sustainable economic growth in Bangladesh.”

The project will  represent the  largest foreign  direct  investment  (FDI) in  the power sector  in  Bangladesh,  and  will cater  to the  country’s  rising  needs  for power, contributing to Bangladesh’s goal of energy security, the statement said.

Reliance Power will relocate one module of world-class equipment procured from internationally reputed original equipment manufacturers for its combined cycle power project at Samalkot in Andhra Pradesh for the Phase-1 project in Bangladesh.   

The transaction will result in debt reduction for Reliance Power of $116 million payable to US Exim, the statement said.

Reliance Power is India’s leading private sector power generation and coal resources company. The company has one of the largest portfolios of power projects in the private  sector in  India,  based  on coal, gas and renewable energy, with an operating portfolio of 5,945 megawatts.

Within the power generation portfolio, JERA owns or has  domestic  investments  in  26  power  projects  with  67  gigawatt of generating capacity and nearly 10GW of generating capacity overseas (including  projects under development).