Indian NTPC ends feasibility study of 1,320 mw Khulna plant

India's state-run NTPC has completed a feasibility study on construction of a 1,320 megawatts (mw) coal-fired power plant in Khulna jointly with BPDB, said a top government official. The Indian National Thermal Power Corporation (NTPC) submitted the report of the feasibility study to the Bangladesh Power Development Board (BPDB) last week, he said. The NTPC took around six months to conduct the feasibility study on setting up the first joint venture power plant between Bangladesh and India. "We have received the report. The NTPC has provided details of the financial and technical issues of the proposed plant," BPDB Chairman ASM Alamgir Kabir told the FE Saturday. "We are now reviewing the report. Outcome of the feasibility study will be shared next week," he said. The issue of coal sourcing to run the 1,320 mw power plant is now being studied by an Indian consultant, said the BPDB Chairman, without mentioning the consultant's name. The BPDB assigned the NTPC to conduct the feasibility study in September 2010, and it would pay the Indian organisation US$ 250,000 for carrying out the study. Officials said Bangladesh and India will form the first-ever joint venture power company after reviewing the feasibility study report and the coal sourcing report. The 1,320 mw power plant, to be built near the Mongla seaport in Khulna, will cost around US$1.7 billion. The BPDB has planned to ink a deal with the NTPC in April next, and register the company subsequently with the Registrar of Joint Stock Companies and Firms. The proposed Khulna power plant would use high-quality coal, imported from Indonesia or Australia, said a power ministry official. Coal from India would not be used in the plant, as it is of low quality and harmful to environment, he said. The BPDB and the NTPC signed a memorandum of understanding early last year, and accepted the terms and conditions of the proposed company, where they will have a 50:50 share. The two key posts - chairman and managing director - will be selected from the members of both sides. Each of the organisations will contribute 25 per cent of the total project cost, and the rest will be raised through loans. Valuation of Bangladeshi land, to be used for the power plant project, would be calculated and treated as equity. The BPDB officials said apart from the proposed 1,320 mw power plant, the government has moved to install a number of coal-based power plants to diversify fuel sources, and cut the country's over-dependency on natural gas for electricity generation. A 250 mw coal-fired power plant, located at the mouth of the Barapukuria coalmine, is the country's lone coal-fired power plant. The country's overall electricity generation is now hovering around 4,300 mw, against the demand for over 6,000 mw.