The state-run Bangladesh Power Development Board (BPDB) signed a deal with the Dongfang Electric International Corporation (DEC) of China on Tuesday to construct a 150-megawatt (MW) power plant in the country's northern region.
The plant will be built on 18 acres of land in Syedpur under Nilphamari district within 540 days by June 2021.
It will be run with diesel, to be imported from India through a 130-km (kilometre) cross-country pipeline.
The Chinese firm will build the power plant as the engineering, procurement and construction (EPC) contractor.
The total cost to build the power plant has been estimated at around Tk 10 billion, of which the government will provide around Tk 3.02 billion.
Besides, the BPDB will provide around Tk 2.15 billion from its own coffer, and the remaining Tk 4.83 billion will be project loan.
The power plant will be built under the buyer's credit, and the Bank of China will provide 85 per cent of the EPC cost worth US$ 68.49 million.
BPDB Secretary Mina Masud Uzzaman and Ou Yanjian of DEC inked the deal on behalf of their respective organisations.
Prime Minister's Energy Adviser Dr Tawfiq-e-Elahi Chowdhury was the chief guest of the deal signing ceremony, held at Bidyut Bhaban in the city.
Speaking on the occasion, Mr Chowdhury said the cost of building the power plant will be rather cheap.
State Minister for Power, Energy and Mineral Resources Nasrul Hamid was the special guest on the occasion.
He opined that diesel transportation from India's Numaligarh refinery through the proposed pipeline to run the power plant will be risk-free and cost-effective.
This is for the first time Bangladesh has fixed the source of fuel to run a particular power plant.
The state-run Bangladesh Petroleum Corporation (BPC) usually imports diesel and furnace oil from international market through different suppliers to run the country's power plants.
The suppliers are selected every year through open tenders as well as government-to-government (G2G) negotiation.
The BPC and the Indian state-run Bharat Petroleum Corporation Ltd (BPCL), the owner of Numaligarh refinery, are currently working together to build the cross-country pipeline to supply the fuel.
Indian government will bear the total cost to build the pipeline that will touch Panchagarh, Nilphamari and Dinajpur to reach Parbatipur oil storage tanks in Bangladesh.
Of the total 130-km pipeline, the length inside Bangladesh will be 125 km, and around five km inside India.
Azizjst@yahoo.com