The Asian Development Bank’s (ADB) approved debt financing and partial risk guarantees totaling $583 million for the Reliance Bangladesh liquified natural gas (LNG) and power project.
The project, which includes a power generation facility to be located in Meghnaghat, near the capital city of Dhaka, and an LNG terminal, near Kutubdia Island south of Chittagong, will significantly increase power generation and improve energy infrastructure in Bangladesh, ADB said.
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 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-dependent 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 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.