Reliance Power along with Japan’s JERA has secured $642-million loan for the Bangladesh project.
The loan will be given by a group of banks that includes the Japan Bank for International Cooperation(JBIC). JERA, one of the largest power utilities of Japan, has partnered with Reliance Power for jointly setting up 750 MW gas-based combined cycle power project (Phase-1) at Meghnaghat, in Bangladesh. Reliance Power will hold 51 per cent stake while JERA will hold 49 per cent stake in the joint venture company.
Reliance Power had signed an MoU, in September last year for setting up 3,000 MW gas-based combined cycle power project in phases in Bangladesh.
The company entered into an EPC contract with Samsung C&T in July this year. With this loan agreement, all major contracts required for the development of the project have been completed. Going forward, Reliance Power and JERA will focus on construction and work towards achieving commercial operation in 2022, it said.
“We are delighted to achieve financing tie-up for this landmark project, which is the largest foreign direct investment and the largest Independent Power Producers in Bangladesh, with a consortium of banks led by JBIC. It represents one of the largest funding tie-ups for a project in Bangladesh’s power sector,” said Anil D. Ambani, Chairman of Reliance Power.
Others include Asian Development Bank, Mizuho Bank, Sumitomo Mitsui Banking Corporation, MUFG Bank and Societe Generale, the company said. The electricity generated will be sold under a long-term power purchase agreement with the Bangladesh Power Development Board for 22 years from the start of commercial operations.
“In Bangladesh, where the high growth in electricity demand is expected to accompany the steady economic development, we aim to contribute to the country’s economic expansion through our participation in power generation and infrastructure businesses, including this project,” said Satoshi Onoda, President of JERA.