Reliance Power and JERA join venture company achieves financial closure for a new gas-fired power generation project in Bangladesh
Published 4 March 2021
Indian business tycoon Anil Ambani’s Reliance Power and Japan’s JERA-backed joint venture company has achieved financial closure for a new gas-fired power generation project in Bangladesh.
The project company has achieved financial closure for the project with a group of lenders that includes Japan Bank for International Cooperation (JBIC) and Asian Development Bank (ADB). All requisite conditions for availing drawdown under the loan agreements have been satisfied, the company said.
Reliance Power Limited, a part of the Reliance Group, is India’s leading private sector power generation and coal resources company. The company has one of the largest portfolios of power projects in the private sector in India, based on coal, gas and renewable energy, with an operating portfolio of 5,945 megawatts.
A financial closure is attained when all the tie ups with banks or financial institutions for funds and all the conditions precedent to initial drawing of debt are satisfied.
This Project is to build, own, and operate a 745 MW (net output: 718 MW) natural gas combined-cycle power project in Meghnaghat, Narayanganj, located approximately 40 km southeast of Dhaka.
Reliance Power’s wholly owned subsidiary Samalkot Power Limited has received the approval from the US Exim Bank to sell one module of equipment to Samsung C&T Corporation of South Korea, who is the EPC contractor for the project, for around $205 million.
Notice to Proceed has been issued by the Project Company to Samsung C&T, who in turn have issued the same instruction to Samalkot Power for supply of equipment. Samalkot Power will supply one module of world-class equipment procured from internationally reputed original equipment manufacturers to the Phase 1 Project in Bangladesh.
Reliance Power’s networth is Rs. 12,063 Crore ($1.6 billion) and Debt to Equity Ratio, as of December 2020 is 2.24:1, which is among the lowest in the industry. Reliance Power, which is reeling under debt said that will achieve a total debt reduction of upto Rs. 3,000 crore or $400 million by March 2021.
The company has one of the largest portfolios of power projects in the private sector in India, based on coal, gas and renewable energy, with an operating portfolio of 5,945 megawatts.
For JERA, this development is a part of its significant push towards achieving Zero CO2 Emissions by 2050. In February, JERA concluded a Memorandum of Understanding (oOU) with Petroliam Nasional Berhad (PETRONAS), Malaysia’s national oil and natural gas company, concerning cooperation in the decarbonization sector.
Against the backdrop of growing global demand for LNG and the need for a decarbonized society, the MOU specified that JERA and PETRONAS will discuss opportunities to cooperate in promoting the use of LNG in Asian countries and in establishing supply chains for ammonia and hydrogen fuels.