The Asian Development Bank (ADB) has agreed to provide $200m to Reliance Bangladesh LNG and Power (RBLPL) to construct and operate a 718MW combined-cycle gas-fired power plant in Bangladesh.

Located on the banks of the Meghna River, southeast of Dhaka, the project will increase country’s energy generation capacity by 4%. Developers intend it to minimise the need for electricity imports, and import of fuels for power generation, such as coal and oil.

The agreement was signed by ADB finance Asia director Shantanu Chakraborty and RBLPL CEO Ranjan Lohar.

Lohar said: “RBLPL is privileged to have the support of international development banks including ADB for this power plant project in Bangladesh. Through the project, RBLPL aims to contribute towards the country’s robust economic growth.”

Chakraborty said: “This highly energy-efficient project will help address a widening gap between the demand and supply of electricity in Bangladesh, which is critical for continued industrial and economic growth.

“ADB has been instrumental in mobilising crucial commercial financing, incorporating best practices in environmental and social standards, and establishing precedents for future financing of similar large-scale projects in Bangladesh, by boosting investor and lender confidence.”

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ADB says the power plant will address the issue of energy shortages and drive further private sector investments in Bangladesh’s power sector when completed.

Of the $200m funds, a $100m loan will be offered by ADB. The remaining $100m will be provided by Leading Asia’s Private Infrastructure Fund, which is administered by ADB.

Japan Bank for International Cooperation and four other commercial banks will co-finance the project. Nippon Export and Investment Insurance will provide insurance to the commercial banks.

ADB is said to have been associated with the project since the initial stages of development as a leading anchor lender.

In June 2018, ADB agreed to provide a $500m loan for an 800MW power plant project in Khulna, Bangladesh, along with associated connections to natural gas and power transmission facilities.