Saudi Aramco and ACWA Power signed a memorandum of understanding (MOU) with Bangladesh on Thursday to develop a 3,600-megawatt LNG-based power plant and terminal in the country.
As part of the deal, the Saudi companies will invest around $3 billion, the Bangladesh government said at the recent signing ceremony.
The Bangladesh prime minister’s investment adviser, Salman Fazlur Rahman, said the agreement “represented one of the largest deals in Bangladesh’s lucrative power sector” and reflected confidence in the country’s “investment-friendly environment.”
ACWA chairman Mohammad Abdullah Abunayyan said his company would make the direct investment by next year. He described the project as a “landmark” that would be the company’s largest gas-to-power development and its first association with Aramco in such a project.
The plant and terminal are set to be built in either the Moheshkhali area of Cox’s Bazar or the port of Payra. As per the deal signed with the Bangladesh Power Development Board (BPDB), Saudi private company ACWA Power will build the power plant along with an LNG (liquified natural gas) terminal to facilitate fuel supply to the plant.
It will also set up a 2 MW solar power plant under the deal. Of the $3 billion total investment, $2.5 billion will be invested for the power plant while $500 million will be spent to build the LNG terminal.
Officials said this has been the first ever deal signed between Bangladesh and Saudi Arabia regarding investment. ACWA Power is a global leader in water desalination and power generation
Riyadh and Dhaka have long maintained close bilateral relations, with the Kingdom being the largest source of Bangladesh’s vital foreign remittances. LNG is vital to the future of power generation world-wide, making, the Saudi Aramco and ACW Power interest in LNG in Bangladesh critical.
Relations have deepened in recent years, with the two countries signing a defense agreement in February. In March, a high-powered 52-member Saudi investment delegation signed a host of agreements and MoUs worth up to $20 billion.
Source: Combined reports, Reuters and The Independent