Mega power plant to be set up on closed KNM land
The government has taken a move to set up an 800-MW power plant on the land of the closed Khulna Newsprint Mills (KNM).
According to official sources, state-owned North-West Power Generation Company Ltd (NWPGCL) will set up an 800-MW combined cycle dual-fuel power plant having two units of 400 MW each.
"We've already completed our necessary process, including appointment of an EPC (engineering, procurement and construction) contractor for the project," NWPGCL Managing Director and Chief Executive Officer (CEO) Khursedul Alam told UNB.
He said the NWPGCL awarded the EPC contract to the joint venture (JV) of Shanghai Electric of China and Ansaldo Energia of Italy and recently signed the deal at a contract value of $359 million.
The joint venture company will install the first unit of the project within 30 months and the second one within 36 months, he added.
The government officially closed down the state-owned KNM on November 30, 2002 amid short supply of raw materials.
KNM, a subsidiary of the Bangladesh Chemical Industries Corporation (BCIC), was established in 1959 on about 87 acares of land on the bank of the Bhairab River at Khalishpur in Khulna district as the first newsprint mills of the country.
The Gewa timber from the Sundarbans was its main raw material for the production of about 50,000 mts of paper annually, according to officials.
But the Forest Department imposed a ban on cutting such trees following the declaration of the Sundarbans as a world heritage site which finally led to the closure of paper production in the mills, they said.
Following the shutdown of the mills, the entire establishment remained idle for more than one and a half decades and now a handful of its staff live at the mill premises as its godown is now being used for fertiliser storage.
Against the backdrop, a decision was made at the government's policymaking level to sell off the property of the mills and NWPGCL offered the BCIC to purchase those.
After a long negotiation, the NWPGCL bought 50 acres of land for setting up the proposed power plant and moved to implement its project, officials said adding that the BCIC was paid Tk 254 crore for taking over the site.
They said it was initially estimated that the power plant would require an investment of Tk 8,500 crore (about $ 1 billion) of which Tk 6000 ($705 million) will come as loan while the government will provide Tk 2,500 crore and NWPGCL 50 million for the project.
Of the loan $705 million, the Asian Development Bank has agreed to finance $500 million (about Tk 4,250 crore) while the remaining $205 million will come from the Islamic Development Bank (IDB).
NWPGCL said they are planning to operate the power plant through imported LNG as there is gas supply network within 12 km of the area. But there will be a provision to operate the plant with liquid fuel in case of any gas supply shortage.
Khurshedul Alam said the biggest benefit of the new project will be replacement of liquid-fuel fired power plants which are now being operated in Khulna region with higher production costs.
"Once the power plant comes into operation, the power generation cost will come down substantially and the national grid will get low-cost electricity," he said. -UNB