Bangladesh's Summit, Japan's JERA to invest $500 million in Cox's Bazar energy project

SINGAPORE/DHAKA (Reuters) - A company controlled by Bangladesh’s Summit Group said on Wednesday it had signed a memorandum of understanding (MOU) with Japan’s JERA Asia to develop energy infrastructure including port facilities in the Matarbari area in Cox’s Bazar.

Under the MOU, both companies will initiate the project, which is capable of handling 20 million tonnes of bulk cargo a year, Summit Corp said in a statement. The project will have an estimated investment of more than $500 million.

“This large energy infrastructure project will provide impetus to Bangladesh’s trade by the development of various terminals for cargo and primary fuel in the Matarbari area in Cox’s Bazar,” the statement said.

Summit Corp is a subsidiary of Singapore-based Summit Power International, which has power generation assets in Bangladesh and is owned by Summit Group.

JERA Asia is a subsidiary of JERA, Japan’s top buyer of liquefied natural gas (LNG), and handles project development in energy-related areas.

The MOU was signed during Bangladeshi Prime Minister Sheikh Hasina’s official visit to Japan this week.

On Wednesday, Japan signed a 132.6 billion yen ($1.2 billion) official development assistance deal with Bangladesh to help the South Asian nation improve its infrastructure.

Since 1972, Bangladesh has received $11.3 billion in official development aid from Japan, officials said.

The project is expected to be operational within two years of the signing of a firm project agreement between the companies and the Bangladeshi government, Summit said.

This is a part of Bangladesh’s largest, 1.5 trillion taka ($18 billion) infrastructure project, said a senior energy ministry official, who asked not to be named as he is not authorized to talk to media.

Under the overall government project, the government will build a deep seaport at Matarbari, four units of a coal-fired power plant with a capacity to produce 2,400 megawatts of electricity, and a liquefied natural gas (LNG)-fueled power plant, also with facilities at Matarbari.

In addition, eight coal-fired and LNG-based power plants with 8,320 MW capacity will be set up at Moheskkhali, the official added.

Summit has submitted a proposal to build several power plants and other projects, the official said.

At the seaport, Bangladesh plans to create facilities to load and unload 112,000 tonnes of coal to feed 12 large coal-fired power plants. 1 billion cubic feet per day of LNG supply facilities will also be created at Matarbari.

Reporting by Jessica Jaganathan in SINGAPORE and Ruma Paul in DHAKA, additional reporting by Aaron Sheldrick in TOKYO; Editing by Kenneth Maxwell and Jan Harvey