Consortium to build RM10b power plant in Bangladesh

KUALA LUMPUR: Bangladesh has awarded a US$2.5 billion (RM10 billion) project to build a 1,320megawatt coal-fired power plant to Malaysia.

The decision was conveyed by visiting Bangladeshi State Power, Energy and Mineral Resources Minister Nasrul Hamid to Prime Minister Datuk Seri Najib Razak when he called on him at the prime minister’s office in Putrajaya on Wednesday.

Special Envoy for Infrastructure to India and South Asia Datuk Seri S. Samy Vellu said Najib had expressed the government’s gratitude to Bangladesh for awarding the project on a government-to-government understanding.

“It’s final. The Bangladeshi cabinet has made the decision to award the project to the Malaysian government.

“Now, a Malaysian consortium will implement the project, but the consortium will do a feasibility study first,” he said yesterday.

In 2014, Malaysia and Bangladesh signed a memorandum of understanding to implement the project, paving the way for the Malaysian consortium to finance and build the power plant in Maheshkhali, Cox’s Bazar, with the Bangladesh Power Development Board (BPDB).

The consortium and BPDB would have equal equity shareholding in the power plant with a concession period of between 21 and 25 years.

Samy Vellu said if the parties decided to go ahead with the project after the study, a joint-venture company would be formed to conduct an international tender to appoint the Engineering Procurement and Commission (EPC) contractor for the project.

“The project will be developed on a non-recourse financing basis and the joint-venture company will need to sign a long-term agreement with BPDB as the sole off-taker of power from the project.”

On the project’s timeline, he said the feasibility study was expected to take place within six to nine months, while the tender for the EPC contract would take between three and six months.

The former works minister said it could take up to a year for the completion of the project documentation to achieve a financial close and the construction would take four years.

He said coal, which would be used for the project, would be sourced from Indonesia and South Africa in accordance with the feasibility study.