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Asian Development Bank to provide US$800m to Bangladesh for LNG-based power plant

Asian Development Bank to provide US$800m to Bangladesh for LNG-based power plant

DHAKA: The Asian Development Bank (ADB) assured the official agency concerned of providing nearly US$800 million loan to it for setting up an 800-megawatt (MW) LNG-based power plant in Khulna.

Power Division officials said they held a meeting with the ADB Mission last week where the lender had assured them of the loan for the power plant project.

A Consultation Mission from the ADB met the Power Division, Economic Relations Division (ERD) and other relevant agencies during its more than a week-long visit to Dhaka, they said.

The North-West Power Generation Company Limited (NWPGCL) has taken the project to set up the power plant, to be run by liquefied natural gas (LNG).

It will have dual-fuel provision so that the plant could also be operated by oil during any crisis of gas supply.

A senior Power Division official said the power plant would cost nearly US$1.0 billion where the government’s contribution is expected to be $200 million.

Bangladesh is heavily dependent on its limited natural gas for generating power over the years. Since gas is depleting fast against the backdrop of its growing demand every year, the government has decided to set up power plants based on imported LNG, coal and oil.

“As part of the government policy, the NWPGCL has taken the power generation project in Khulna. The LNG to the proposed power plant is expected to be supplied from India,” said the Division official. He said the LNG will be imported through a pipeline from Digha in Kolkata.

According to the NWPGCL, the LNG will be imported from India through a cross-border pipeline. To ensure uninterrupted fuel supply to the combined cycle power plant (CCPP), an 80-kilometre (km) gas transmission pipeline will be built under the project within the territory of Bangladesh.

The project also includes construction of a 230 kilovolt (kV) switchyard at the CCPP site and a 30km high-capacity 230 kV and double-circuit transmission lines to deliver the generated power into the national power grid.

Gas supply infrastructure within the territory of India will be constructed by H-Energy Private Limited and will not be a part of the project financed by the ADB, officials said. The Power Division official said once the fund is confirmed within the shortest possible time, the power plant will be set up by 2019.

A high official of the ERD said they had a wrap-up meeting with the ADB mission Sunday last.  Under the South Asia Sub-regional Economic Cooperation (SASEC) initiative, the Manila-based lender is expected to provide the fund, he said.