Saudi Aramco, ACWA Power ink MoU to invest $3bn to build LNG plant and terminal in Bangladesh

Saudi Aramco, ACWA Power ink MoU to invest $3bn to build LNG plant and terminal in Bangladesh
Published: 27 October 2019 - 5 a.m.
By: Martin Menachery
ACWA Power announced signing a memorandum of understanding (MoU) with the Bangladesh Power Development Board (BPDB) for an LNG-based power plant and terminal in Bangladesh. As part of the agreement, ACWA Power will target the development of 3,600MW gas-fired Independent Power Plants representing a total investment amount of approximately $2.5bn, that will help meet the country’s growing power demand.

The project will consist of the intended power plants as well as a regasification terminal on-ground with an expected additional investment of approximately $500mn. The plant will potentially be located in Maheshkhali, or an alternate location, upon completion of the feasibility study.

BPDP chairman Khaled Mahmood and ACWA Power chairman Mohammed Abunayyan signed the agreement for the Natural Gas/R-LNG Based Combined Cycle Power Plant, one of the largest deals for Bangladesh’s power sector. The signing took place in the presence of Salman F Rahman, the Bangladesh prime minister’s adviser for private industry and investment, Nasrul Hamid Bipu, state minister for power, energy and mineral resources and Dr Ahmad Kaikaus, senior secretary for power division, and Golam Moshi, Bangladesh ambassador in Riyadh. Also present were Rajit Nanda, chief investment officer at ACWA Power, Ayad Al Amri, executive director for gas-to-power and Abdulsalam Al Hazmi, VP, performance and business development, Aramco LNG Trading Unit.

Paddy Padmanathan, CEO of ACWA Power, said: "As we continue to expand our global operations, we are proud to embark on this ambitious project with the Bangladesh government. We have a long legacy of working collaboratively with leadership in growing economies to sustainably supply their power and water needs at low cost in order to accelerate their socio-economic and financial development. In line with the Bangladesh Vision 2021 and Vision 2041, we will be contributing to the energy security of the country and ensuring the foundations of its success for generations to come.

The signing will also mark ACWA Power’s largest gas-to-power development and its initial foray into the Bangladesh power market. ACWA Power will also work with Saudi Aramco for the first time for such a project.

Rajit Nanda, chief investment officer of ACWA Power, said: “Expanding our investment portfolio is a key focus for the company and we are delighted to be working with BPDB to participate in the burgeoning power generation sector here. With vast growth opportunities available, we are keen to extend our foothold in the region through our presence in Bangladesh. This is an exciting project for the company and we look forward to working with strategic partners such as Saudi Aramco to bring it to life and create value for the people and economy of Bangladesh.

Bangladesh’s power sector is one of the fastest growing in South Asia, with a current installed capacity of around 24,000MW electricity from 3,200MW in 2009.

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