Anil Ambani Group-controlled Reliance Power said Asian Development Bank has approved debt financing and partial risk guarantees totaling $583 million to the company’s Bangladesh LNG and Power Project.
“ADB’s financing package includes loans and partial risk guarantees for the power generation facility, as well as for the LNG terminal. The total project cost is approximately $1 bilion,” the company said.
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 3,000 MW in Bangladesh.
Energy from the power plant will be sold into the country’s electricity grid under a long-term power purchase agreement with the Bangladesh Power Development Board.
The project, which includes a power generation facility to be located in Meghnaghat near Dhaka and an LNG Terminal near Kutubdia lsland south of Chittagong will significantly increase power generation and improve energy infrastructure in Bangladesh.
“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.
“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 enders to Bangladesh.”
The LNG plant is part of efforts to diversify Bangladesh’s sources of energy as local demand 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-dependent infrastructure to remain viable while opening the country to access natural gas from global markets,” Reliance Power 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,” said Venugopala Rao, CEO of Reliance Power.
“ADB’s leadership in financing will help us to develop this clean and reliable LNG-based power project in Bangladesh.”
ADB, based in Manila, uses finance to reduce poverty in Asia and the Pacific. Established in 1966, ADB is celebrating 50 years of development partnership in the region.
It is owned by 67 members, including 48 from the region. In 2016, ADB assistance totaled $31.7 billion, including $14 billion in cofinancing.