Biggest private investment in power sector now official

The proposed 612-megawatt imported coal-fired power plant in Banshkhali of Chittagong is all set to become the biggest private sector investment in the country’s power sector.

A joint venture of Bangladesh’s S Alam Group, and China’s SEPCO-3 Electric Power Constitution Corporation and HTG Group will build the ultra super critical thermal power plant with a net capacity of 1,224MW at a cost of $2.4bn (over Tk188.4bn).

The government has selected SS Power 1 Ltd, a concern of the S Alam Group, for building the first unit through tender process while SS Power 2 Ltd was given an unsolicited deal to build the second unit under the speedy supply of power and energy act of 2015.

Yesterday, Power Development Board Secretary Mazharul Haque and SS Power Ltd Chairman Mohammed Saiful Alam signed a contract at the Bidyut Bhaban in Dhaka.

The agreement says that the government will buy electricity from the plant at the rate of Tk6.61 or 8.259 cents per kilowatt-hour (kWh). The tariff, however, will vary with the ups and downs in coal price in the international market.

A non-binding memorandum of understanding (MoU) has been signed with renowned global coal suppliers Glencore, Bayan and AGP, who have mines in Indonesia, Australia, South Africa, Russia and Colombia.

Speaking at the contract signing programme, Tawfique-E-Elahi Chowdhury, energy adviser to the prime minister, said: “Just a few years ago, it was unthinkable that a private company could invest $2.4bn to produce electricity from imported coal.”

In support of the government’s stance regarding unsolicited deals signed under the speedy supply act, the adviser said: “Power generation would have been still stuck in red tapes had the speedy supply of power and energy not been enacted.

The act aims at quick disposal of contracts to meet the raging demand for power and energy in the country.

Abdus Samad, vice-chairman of the S Alam Group, said this project is rare in the country because it is being implemented without any bank loan.

“That is why there is no chance of having a negative impact on the economy or the banking sector of Bangladesh,” he said.

Samad also said that since Bangladesh does not have labour expert in handling coal, the necessary manpower for the project would be brought from abroad.

Slated for a March 2016 start of construction work, the plant is expected to start supplying power to the national grid by November 2019.

The Centre for Environmental and Geographic Information Services (CEGIS) submitted an environmental impact assessment (EIA) report to the Department of Environment (DoE) in August 2015. But DoE has yet to approve the report.

Of the total project cost of $2.4bn, more than $1.7bn will come from the foreign investors.

Source URL: Dhaka Tribune