The Government of Bangladesh has awarded a build-own-operate project for a 426MW combined-cycle power plant to Sembcorp Utilities, which is a subsidiary of Singapore-based Sembcorp.
The power plant will be developed under a public-private partnership in the Sirajganj district, and is expected to cost around $390m.
While natural gas will be used as the primary fuel for the power generating facility, high-speed diesel will be the back-up.
Power output from the facility will be supplied to the Bangladesh Power Development Board under a 22.5-year power purchase agreement.
Sembcorp will form a joint venture entity, Sembcorp Sirajganj Power, for the project along with North-West Power Generation, a subsidiary under the Bangladesh Power Development Board.
The power plant, which is expected to be completed in 2018, will be primarily owned by Sembcorp through a majority 71% stake and the remaining 29% being held by North-West Power Generation.
Sembcorp group president and CEO Tang Kin Fei said: "We are pleased to secure this project as it provides us with a platform to grow our power business in Bangladesh.
"Bangladesh offers strong growth potential and we see the opportunity for us to further grow our utilities and other businesses in the country."
According to the company, energy demand in Bangladesh is on the rise due to steady economic expansion. The country’s current power generation capacity is not sufficient to meet the load demand, therefore, it intends to increase its electricity generation capacity by 10GW over the next ten years.
North-West Power Generation managing director AM Khurshedul Alam said: "This is the first public-private partnership project with a foreign investor in the power sector in Bangladesh, and we are happy to be partnering Sembcorp in this landmark project.
"We believe that together we can help to meet the growing demand of electricity in Bangladesh."
Earlier in the month, state-owned Coal Power Generation Company Bangladesh (CPGCBL) announced plans to develop two 600MW power plants on an island in the Bay of Bengal.
Developments are expected to cost around $4.6bn.