Bangladesh signs contracts for 4 mega power plants

Bangladesh signed contracts with two companies to set up three base-load power plants and one peaking plant having total generation capacity of 1167 MW.

Of the four plants, three base-load plants will be set up by private sector sponsor Summit Group as independent power producer  while the other will be installed in the public sector by a Spanish EPC contractor.

Summit Group's three IPP projects are 341 MW Bibiyana-I, 341 MW Bibiyana-II, and the 335 MW Meghnaghat dual-fuel plant. State-owned Power Development Board will purchase electricity from these plants at rates between 3.3220 and 3.9863 US cent per kilowatt hour or about Tk 1.90 per unit.

Single cycle units of these three plants are scheduled to come into operation in May 2013 while their combined cycle units will start commercial operation in May 2014.

As per contracts, all the three base-load plants will be combined cycle and will supply electricity to the government for 22 years.

On the other hand, state-owned North-West Power Generation Company Ltd signed contract with Spanish company Isolux Ingenieria SA to set up the 150 MW Khulna Peaking Power Plant by March 2013.
Isolux Ingenieria SA & Initec Energia SA JV will supply and install the project as EPC contractor.

Earlier, the government signed 34 contracts to set up 37 power plants having total capacity of 3334 MW. But all those projects were either peaking plants or rental or quick rental power plants each having small scale generation capacity of less than 150 MW. Energy experts were critical about those projects as their power generation costs are exorbitant, even at Tk 22 per unit. But the production cost of these IPP projects is as low as Tk 1.90 per unit.

Finance Minister AMA Muhith, who was present at the contract signing ceremony, said that through these projects, the government has finally proceeded towards resolving power crisis by setting up big projects.
Mentioning the energy as the key tools for enhancing work capacity for the development, he said that without electricity development is not possible.

Prime Minister's Advisor Dr Tawfiq-e-Elahi Chowdhury, State Minister for Power Enamul Haque, Power Secretary Abul Kalam Azad and PDB chairman Alamgir Kabir were also present at the signing ceremony held at Bidyut Bhaban.

 A representative of US company GE, which is a joint venture partner with Summit Group, also signed the contracts. Summit Group chairman Mohammad Aziz Khan said that about US$ 800 million will be invested for the three IPP projects in which different international and local financers like IFC, ADB, Islamic Development Bank, IPFF, IDCOL and BIFF will finance US$ 550 million. He said his group is confident to implement the projects on schedule, and even ahead of the schedule.

For 150 MW peaking plant, a senior official of Isolux and company secretary of NWPGC signed the contract on behalf of their respective sides.