Japan's Energy for a New Era [JERA] Co., Inc. (JERA) took over the Indian Reliance's Meghnaghat 718 MW power plant in 2019 and has till date seems to have brought in $1 billion for the project, which will be Bangladesh's largest gas-based Independent power producers (IPP).
The project has significant investment by Japan Bank for International Cooperation (private sector development bank like JICA), together with Asian Development Bank (one of Bangladesh's largest donor bank).
The other banks investing in the project are Mizuho Bank, SMBC, MUFG, Societe Generale, all of which are backed by Nippon Export and Investment Insurance. The project has secured major equipment from General Electric (GE) and Samsung C&T Corporation has built the project based on the Engineering, Procurement, & Construction contract.
It is learnt that since taking over the project in 2019, the project has been facing delays at several steps, be it the gas pipeline or the power grid infrastructure or gas supply.
While local power plants like Summit and Unique got priority in gas pipeline connection or gas supply, JERA's project had to first construct a branch pipeline at its own cost and then once completed, has been sidelined for gas supplies. It is understood that the project has been struggling to receive continuous gas for the commissioning and operations since last 8 months.
Smitesh Vaidya, Head of Contracts & Commercial at JERA Meghnaghat Power Limited, said: "With the state-of-the-art facility, most efficient turbines and a low tariff, JERA Meghnaghat project would add a great impetus to ensuring uninterrupted power supply in Bangladesh."
JERA also shown strong interests in setting up the Matarbari land-based LNG terminal. It operates 11 LNG terminals in Japan, all of which are land-based. Japan is prone to several environmental disasters and such land-based terminals provide a stable source of energy to the country.
Bangladesh on the other hand, despite being prone to cyclones and bad weather in the Bay of Bengal, has 2 floating-ship based Floating Storage Regasification Unit (FSRU). In this year alone, at least 1 of the FSRUs was not available for operations for more than 9 months, significantly hampering the gas supplies.
Therefore, it is in the nation's interest that the interim government looks at quickly setting up the land-based terminal in the country to ensure continuous energy supplies.
In one of the letters written to the government, the company mentioned: "JERA is interested in future investments in the land-based LNG terminal project, renewable project development (solar, wind), alternative energy (hydrogen, ammonia) and LNG supply. Such investments would amount to FDI of around $2 billion to $3 billion in the next 5 to 10 years. From a long-term perspective, JERA would also look at promoting net zero emissions for Bangladesh and would like to work together for a sustainable future of the country. In the near future, JERA intends to establish a local office in Dhaka."
