The investment has been finalised within only four months of signing a memorandum of understanding between JERA and Summit in Tokyo, Summit said in a statement yesterday.
In May, Summit Corporation and JERA Asia had inked the initial agreement to initiate an energy infrastructure project at Matarbari in Cox’s Bazar involving an investment of more than $500 million.
As a shareholder of Summit, JERA will strive to increase the corporate value of Summit through the efficient construction and operation of its power generation facilities and contribute to the sustainable economic growth of Bangladesh, according to the statement.
Summit’s Founder Chairman Muhammed Aziz Khan expressed his satisfaction with the investment.
“Much-needed technology and capital for Bangladesh’s fast-growing power and energy market will be available from JERA with their vast knowledge and balance sheet. JERA by far could be our best partner.”
“This partnership will support our investment programme of $3 billion by 2022 in Bangladesh.”
Toshiro Kudama, CEO of JERA Asia, said JERA is fully dedicated and committed to the future development and economic growth of Bangladesh through this precious partnership with Summit.
“We believe that Summit has unrivaled presence and capacity in the country. Thus, we will humbly and steadily provide our support to them in the future. We look forward to working together with Summit in supplying not only reliable electricity but also primary energy sources to the people of Bangladesh.”
The International Finance Corporation (IFC), the IFC Emerging Asia Fund, and EMA Power were shareholders of Summit until now and will exit through this transaction, the statement said.
However, the IFC will continue to be a large lender to Summit.
Andrew Yee, co-head of the IFC Emerging Asia Fund, said, “Bangladesh has come a long way and it is a pleasure to see new investors recognising the vast potential offered by this market.” Because the demand for electricity in Bangladesh is expected to grow rapidly with steady economic growth, JERA has positioned it as a priority country for investment, participating in a power generation project in Bangladesh for the first time in September this year, the Japanese company said in another statement.
Summit Power, a Singapore-based unit of Summit Group, is a holding company of all power assets of the Bangladeshi conglomerate.
The largest independent power producer in the country owns and operates power generation facilities that produce approximately 1.8 gigawatt, representing about 12 percent of the country’s capacity.
It is currently constructing power generation facilities with a capacity of about 590 megawatts and, with several new projects also being planned, significant growth is expected in the future, JERA said.
Summit LNG Terminal Co Ltd, which has a capacity to supply 500 million cubic feet of gas per day, is a subsidiary of Summit Power.
The Matarbari project is expected to be functional within two years of signing an agreement between Summit, JERA Asia and the government of Bangladesh, Summit Group said in a statement in May.
The project will have a capacity to handle 20 million tonnes of bulk cargo per annum.