The Asian Development Bank's (ADB) Board of Directors has approved debt financing and partial risk guarantees totalling US$ 583 million to develop the Reliance Bangladesh Liquefied Natural Gas (LNG) and power project.
The project which includes a power generation facility to be located in Meghnaghat near the capital city of Dhaka and an LNG terminal near Kutubdia Island, south of Chittagong, aims to increase power generation and improve energy infrastructure in Bangladesh, said a press release issued by the Manila-based multilateral lender on Tuesday.
The ADB's financing package includes loans and partial risk guarantees for the power generation facility as well as for the LNG terminal, it said, adding that total project cost is approximately $ 1.0 billion.
"ADB's partnership with Reliance Power will help Bangladesh scale up its energy infrastructure to sustain and support the country's economic growth," the release said quoting Director General of ADB's Private Sector Operations Department Michael Barrow.
"ADB's role as a direct lender and guarantee provider will enable Reliance Power to mobilise much-needed long-term debt financing and help attract new lenders to Bangladesh," Mr Barrow was also quoted as saying.
Diversifying Bangladesh's sources of energy is critical for the country as demands for natural gas have placed significant pressures on the country's domestic gas reserves, according to the ADB.
New LNG import facilities will enable the country's existing gas-dependent infrastructure to remain viable while opening the country to access natural gas from global markets, it mentioned.
ADB's support will help Reliance Power Limited to develop an initial approximately 750 megawatts (MW) of gross power generation capacity and terminal facilities for LNG import, it said.
Reliance Power plans to increase its power generation capacity to around 3,000 MW in Bangladesh. Energy from the power plant will be sold into the country's electricity grid under a long-term power purchase agreement with the Bangladesh Power Development Board.
"Reliance Power has achieved a major and important milestone of approval of financing for its landmark project in Bangladesh. This is an important step in helping Bangladesh achieve energy security," CEO of Reliance Power Venugopala Rao was quoted as saying.
"ADB's leadership in financing will help us to develop this clean and reliable LNG-based power project in Bangladesh," said the CEO.
Reliance Power Limited, a part of Reliance Group, is India's leading private sector power generation company. The company has the largest portfolio of power projects in the Indian private sector, based on coal, gas, hydro, and renewable energy, with an operating capacity of 5,945 MW, according to the press release.
ADB is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration, it mentioned.
Established in 1966, ADB is celebrating 50 years of development partnership in the region. It is owned by 67 members- 48 from the region. In 2016, ADB assistance totalled $ 31.7 billion, including $ 14 billion in co-financing, the release said.
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