KUALA LUMPUR: Bangladesh has awarded a USd2.5 billion (USd1 = RM4.03) project to build a 1,320-megawatt coal-fired power plant to Malaysia.
The decision was conveyed by visiting Bangladesh State Minister for Power, Energy and Mineral Resources, Nasrul Hamid, to Prime Minister Najib Razak when he called on the latter at the Prime Minister’s Office in Putrajaya yesterday.
Special Envoy for Infrastructure to India and South Asia S. Samy Vellu, said Najib has expressed the government’s gratitude to the Bangladeshi government for awarding the project on a government-to-government understanding.
“It’s final. The Bangladesh Cabinet made the decision to award the project to the Malaysian Government.
“Now, a Malaysian consortium will implement the project but it will do a feasibility study first,” he said in a statement here.
In 2014, Malaysia and Bangladesh signed a government-to-government memorandum of understanding (MoU) to implement the project.
The MoU paves the way for the Malaysian consortium to finance and build the power plant in Maheshkhali, Cox’s Bazar, Bangladesh with the Bangladesh Power Development Board (BPDB).
The Malaysian consortium and BPDB would have equal equity shareholding in the power plant with a concession period of 21 to 25 years.
Samy Vellu said if the parties decided to go ahead with the project after the completion of the feasibility study, they will form a joint venture (JV) company and conduct international tender to appoint the engineering procurement and commission (EPC) contractor for the project.
He said the project would be developed on a non-recourse financing basis and the JV company would sign a long-term power purchasing agreement with BPDB as the sole off-taker of power from the project.
On the project’s timeline, Samy Vellu said, the feasibility study was expected to take place within six to nine months, tender for EPC contract (three-six months), completion of project documentation to achieve financial close (nine-12 months) and construction would take four years.
He added coal for the project would be sourced from the region – Indonesia and South Africa — subject to the feasibility study.
Bangladesh awards USD2.5b coal-fired power project to Malaysian firm