The Asian Development Bank’s (ADB) Board of Directors has approved debt financing and partial risk guarantees totalling $583 million to develop the Reliance Bangladesh Liquefied Natural Gas (LNG) and Power Project, said Anil Ambani-led Reliance Power in a statement.
The Project, which includes a power generation facility to be located in Meghnaghat, near Dhaka, and an LNG Terminal, near Kutubdia Island south of Chitagong, will significantly increase power generation and improve energy infrastructure in Bangladesh.
The financing package of ADB includes loans and partial risk guarantees for the power generation facility, as well as for the LNG terminal and the power project, being set up for $1 billion.
“ADB’s partnership with Reliance Power will help Bangladesh scale up its energy infrastructure to sustain and support the country’s economic growth,” said Michael Barrow, Director General of ADB’s Private Sector Operations Department adding that 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.
Diversifying Bangladesh’s sources of energy is critical for the country as demands for natural gas have placed significant pressures on the country’s domestic gas reserves.
New LNG import facilities will enable the country’s existing gas-department infrastructure to remain viable while opening the country to access natural gas from global markets.
ADB’s support will help Reliance Power Limited to develop an initial approximately 750 megawatts (MW) of gross power generation capacity and terminal facilities for LNG import.
Reliance Power plans to increase its power generation capacity to around 3000 MW in Bangladesh. Energy from the power plant will be sold in to the country’s electricity grid under a long-term power purchase agreement with the Bangladesh Power Development Board.
“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,” said Venugopala Rao, CEO of Reliance Power adding that ADB’s leadership in financing will help us to develop this clean and reliable LNG-based power project in Bangladesh.
