Reliance Power signed a partnership agreement with JERA, one of the largest power utilities of Japan, for jointly setting up 750 MW gas based combined cycle power project (Phase-1) at Meghnaghat in Bangladesh, report agencies.
Reliance Power will hold 51 per cent stake while JERA will hold 49 per cent stake in the joint venture company. The project will be set up within 36 months of signing the agreements.
The transaction will result in debt reduction for Reliance Power of Rs. 8.35 billion (USD 116 million) payable to US-Exim.
The gas-based combined cycle power project will be set up in Narayanganj's Meghnaghat, 40km southeast of Dhaka.
The Bangladesh Power Development Board will buy electricity from the project for 22 years.
The project company, with support from the two Asia's energy giants, will negotiate the engineering, procurement and construction contract and loan agreements for the project in order to make final the investment decision for the project.
Anil D Ambani, chairman of Reliance Group of Companies, said, "This joint venture project will give a tremendous boost to the economic and industrial growth of Bangladesh and will enhance the energy security of the country with clean, green and reliable LNG based power.
Satoshi Onoda, JERA president, said, "Together with Reliance Power, a leading private power company in India, JERA will realise a stable power supply and contribute to sustainable economic growth in Bangladesh."
Reliance plans to invest about $1 billion to set up the plant by 2022, Reuters reported.
The combined-cycle power plant will be fuelled by gas and liquefied natural gas.
