Eight Domestic and International Companies Bid for Combined-Cycle Power Project in Bangladesh

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Researched by Industrial Info Resources (Sugar Land, Texas)--In the drive to bridge the power demand and supply gap, the state-controlled Bangladesh Power Development Board (BPD) (Dhaka, Bangladesh) has proposed construction of a 450-megawatt (MW) combined-cycle power project (CCPP) at Sirajgonj, in northwestern Bangladesh. Eight international and national energy firms have submitted bids for the project.

The dual-gas CCPP, which will use gas or furnace oil as feed, is likely to become the first public-private partnership in the country's power generation sector. Total investment in the project is expected to be about $449 million to $561 million. The bidding companies include a consortium of Local Summit Industrial and Mercantile Corporation (Dhaka, Bangladesh) and Shenzhen Nanshan Power Company Limited (SHA:200037) (Shenzhen, China); Essar Power Limited (Mumbai); YTL Power International Berhad (KUL:YTLPOWR) (Kuala Lumpur, Malaysia); GDF Suez Energy Asia Company Limited (Bangkok, Thailand); GMR Energy Limited (Bangalore, Karnataka); a consortium of Shasha Denims Limited (Dhaka, Bangladesh) and ERM Power Pty Limited (Brisbane, Australia); Beijing Jingneng Clean Energy Corporation (Beijing, China); and Rupayan Power Limited (Dhaka, Bangladesh). The winning bidder will have to sign a power purchase agreement with BPBD.

BPDB and its subsidiaries, which will hold a 40% stake in the venture, also hold ownership of the land required for the power project. Officials have indicated that the land will be leased to the company executing the contract for the same period as the PPA.

In 2002, BPBD had planned the Sirajgong CCPP as Bangladesh's first private-public partnership project. The contract for construction of the power plant, which was awarded to Local Summit International, was revoked in 2004. This was followed by retendering for the project. However, BPBD received no proposals from energy companies. Earlier, leading Indian conglomerate Tata Group (Mumbai), which has proposed a $3 billion investment on a steel and fertilizer plant and power project, decided to scrap the proposal after procedural bottlenecks, bureaucracy, and a lack of support from the Bangladeshi government.

The CCPP project comes close on the heels of an agreement between India's NTPC Limited (BSE:532555) (New Delhi) and BPDB to undertake feasibility studies to jointly develop two coal-based power projects. The companies propose to appoint consultants for the feasibility studies for the 1,320-MW power projects in Khulna and Chittagong. As part of the agreement, which was signed on September 30, 2010, BPDB will pay $240,000 to NTPC toward the costs of feasibility studies. Earlier, a joint team from both countries identified Anwara, which is in Chittagong, and Chalna, which is near Khulna, as sites for the power projects. In a related development, BPDB has been directed to seek clearances from the Civil Aviation Authority of Bangladesh (Dhaka, Bangladesh) for construction of the two thermal-power projects. The clearance is mandatory as exhaust and smoke effluents from the power plants could pose problems for the country's aviation sector.

Established in 1972, BPDB is responsible for conceptualizing, constructing and operating power projects in the country. Presently, BPDB has a total electricity generating capacity of 5,493 MW. Of this, CCPP, steam-based power plants, diesel-powered power projects, gas turbine-based and hydropower projects account for 24.74%, 48.03%, 4.89%, 18.15% and 4.19%, respectively. Bangladesh has embarked on its "Power for All" program, which aims to make electricity accessible to the common man by 2020. As part of this initiative, about 60% of the country's population will have access to power by 2012.

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