Confidence Group to build country's 2nd-largest pvt power plant at Bangabandhu Shilpa Nagar
The land lease agreement is expected to be inked in a month
Zodiac Power Mirsharai Limited, a concern of Confidence Power Holdings, is set to lease land from Bangabandhu Sheikh Mujib Shilpa Nagar for the construction of Bangladesh's second-largest private power plant.
The proposed power plant will have a capacity of 660 megawatts and will be either gas-based or re-gasified liquefied natural gas (RLNG) based. The cost of the project is estimated at $550 million. It is expected to be completed and made operational by June 2027.
This power plant will mark a significant milestone as the second-largest power plant implemented by any locally-owned private company.
The current largest power plant owned by a local private company is S Alam Group's Banshkhali 1320MW (SSPL) Coal Power Plant.
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To materialise this ambitious project, Confidence Power Holdings has already deposited Tk52 crore as leasing fee for a 33-acre area of land and is awaiting a signing of the agreement.
Imran Karim, vice chairman of Confidence Power Holdings, expressed optimism about finalising the land lease agreement by next month.
The company received a letter of intent on 16 January 2022. It is targeting the year 2027 to have the power plant become operational, he told The Business Standard.
In order to execute this project, Confidence Power has entered into a partnership with American General Electric, which will own 20% of the project share, he added.
The land lease agreement for the power plant was supposed to be completed earlier, but matters have been getting delayed as the existing gas-based power plants are struggling with gas shortage, given that the plants are not getting supplies due to depleting production.
Shaikh Yusuf Harun, executive chairman of the Bangladesh Economic Zones Authority (Beza), told TBS that the issue of land lease for the power plant is nearing its final stages. However, there are concerns regarding gas supply to the power plant after its construction is completed.
"We have got commitments [from the authorities] for gas supply to existing industrial plants. But it will be difficult to meet the new industrial demand from the existing gas supply. If the government arranges additional gas supply, the power plant can be fuelled," he said.
Harun also pointed out that Confidence Power, the company responsible for the power plant, has the option to generate electricity by importing gas on its own to fulfill its gas requirements.
"Since the Energy Division has given the approval, we are happy to have it bring extra gas. If it alone consumes a lot of gas [from the national grid], then our other industries will suffer."
On a positive note, Imran Karim expressed the hope that by 2027, gas supply will be available for the power plant. The government is initiating the establishment of two more floating storage and re-gasification facilities to facilitate the import of LNG, which could help meet future gas demand.
At present, Bangladesh has a total capacity, including captives and renewables, of producing 28,134MW of electricity, with private power plants' share being at 10,115MW. On the other hand, demand for electricity in the country hovers between 12,000MW and 15,000MW.
Currently, Confidence Power Holdings Limited operates four power plants in Bogura, Rangpur, and Chattogram, collectively generating 394MW of electricity.
