The Asian Development Bank (ADB) has approved $583m financing for the development of the Reliance Bangladesh Liquified Natural Gas (LNG) and Power Project.
The first phase of the project will see construction of a 750MW combined cycle gas-fired power plant and an LNG terminal with an investment of $1bn.
The financial package from ADB will comprise loans and partial risk guarantees for both the power plant and the LNG terminal.
ADB private sector operations department director general Michael Barrow said: “ADB’s partnership with Reliance Power will help Bangladesh scale up its energy infrastructure to sustain and support the country’s economic growth.
“ADB’s role as a direct lender and guarantee provider will enable Reliance Power to mobilize much needed long-term debt financing and help attract new lenders to Bangladesh.”
While the power plant, which will be fueled by LNG, will be built in Meghnaghat, near Dhaka, the LNG terminal will come up near Kutubdia Island, located south of Chittagong.
The electricity generated from the power plant will be sold into Bangladesh’s power grid through a long-term power purchase agreement with the Bangladesh Power Development Board.
On the other hand, the LNG terminal, which will have a capacity of 500mmscfd, is supported by an agreement signed by Reliance Power with PetroBangla for its usage.
Both the power plant and the LNG terminal are expected to increase power generation in Bangladesh significantly besides boosting its energy infrastructure.
Reliance Power CEO Venugopala Rao said: “Reliance Power has achieved a major and important milestone of approval of financing for its landmark project in Bangladesh. This is an important step in helping Bangladesh achieve energy security.
“ADB's leadership in financing will help us to develop this clean and reliable LNG-based power project in Bangladesh.”