DHAKA (Reuters) - Bangladesh announced two major energy deals on Wednesday, with a total $5.8 billion investment, two involving U.S. firm General Electric (GE.N).
Nearly 30 percent of Bangladesh’s population do not have access to electricity. The country relies on its gas resources for 70 percent of its energy production but as demand has risen its supply has struggled to keep up and the country is now becoming an LNG importer.
One of the joint ventures unveiled on Wednesday is a partnership between U.S. General Electric, Japan’s Mitsubishi Corporation (8058.T) and local privately-owned Summit. They will set up and invest $3 billion in a 2,400 megawatt (MW) thermal power plant and related oil and LNG terminals, the companies said.
Summit, will have a 55 percent share of the joint venture while Mitsubishi will take 25 percent and GE 20 percent.
“In partnership with Summit Power, our HA (gas turbine) technology enables unprecedented levels of efficiency to strengthen Bangladesh’s power generation,” Russell Stokes, president and chief executive officer of GE Power, said at the deal signing in Dhaka.
The project involves four thermal units of 600 MW each, a 380,000 meter cubic capacity liquefied natural gas (LNG) terminal and oil terminals with 100,000 metric tons capacity.
The three firms signed a memorandum of understanding (MOU) on Wednesday.
Muhammad Aziz Khan, chairman of the Summit Group, said the plan is to launch the project next year and complete it by 2023.
“The project will be using the world’s most efficient and environment friendly technology,” he said.
“We have joined in this tripartite agreement with the widest experience in infrastructure and energy,” said Tetsuji Nakagawa, senior vice president of Mitsubishi.
Later in the day General Electric and state run Bangladesh Power Development Board (BPDB) announced another venture to produce 3,600 megawatts of electricity.
Saiful Hasan Chowdhury, a director of the BPDB said that a joint venture would establish a 3,600MW LNG to gas based combined cycle power plant and associated LNG import terminal and related infrastructure.
“This will cost $2.8 billion and BPDB as lead partner will invest 51 percent while GE will invest 30 percent and the remaining 19 percent stake will be invested by a strategic partner,” he said.
“Over the years, GE has demonstrated a strong willingness to partner with both the private and public sector here in Bangladesh to boost power generation,” said U.S. Ambassador to Bangladesh Marcia Bernicat at a signing event.
She said that the United States, as Bangladesh’s largest foreign direct investor and export market remains committed to building a strong commercial relationship with Bangladesh.
Reporting by Serajul Quadir; editing by Sanjeev Miglani and Elaine Hardcastle