ADB Clears $583mn Financing for Bangladesh LNG Project
The Asian Development Bank (ADB) has approved $583mn debt financing and partial risk guarantees for the integrated project that consists of a gas-based power plant and an LNG terminal that will be developed by India’s Reliance Power, it said December 5.
The power generation facility will be located in Meghnaghat, near the capital city of Dhaka, and the LNG terminal, near Kutubdia Island south of Chittagong.
ADB’s financing package includes loans and partial risk guarantees for the power generation facility, as well as for the LNG terminal. The total project cost is approximately $1bn.
ADB’s support will help Reliance Power to develop about 750 MW of gross power generation capacity and terminal facilities for LNG import. Reliance Power plans to increase its power generation capacity to around 3 GW in Bangladesh, ADB said. Energy from the power plant will be sold to the country’s electricity grid under a long-term power purchase agreement with the Bangladesh Power Development Board.
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. 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.
Separately, ADB announced December 5 it had approved a $310mn loan to "help catalyse economic diversification and revitalization in four coal-dependent cities in Heilongjiang Province in northeast China - Hegang, Jixi, Qitaihe, and Shuangyashan - that would support new small businesses, environmental cleanup from coal mining, and urban infrastructure and services improvements; the four cities had been major coal-mining and coal-fired power generation centres for the last 50 years.