Finance Minister Abul Maal Abdul Muhith, seen at a contract signing ceremony at Biddyut Bhaban in Dhaka Monday.

The long-coveted deal to install the Shiddhirganj 335-MW combined cycle power plant project was signed on Monday, eying on narrowing the mounting demand-supply gap of power.

Electricity Generation Company of Bangladesh (EGCB) Ltd, a concern of Bangladesh Power Development Board, sealed the deal with Spain-based joint-venture company comprised of ISOLUX Ingenieria SA and Sumsung C&T Corporation.

Officials hoped that the gas-based power plant would be 50 percent more efficient in terms of energy consumption compared to conventional ones, also helping to minimise the cost of power generation.

Total cost in the project is $339.18 million, of which the World Bank is providing $221.10 million. The government and EGCB Ltd will provide the rest to complete the project within the next 30 months.

With the new power plant, the share of power generation from quick rental power plants will come down to 7 percent of the country’s total power generation by 2016 from existing 21 percent, Finance Minister AMA Muhith said while speaking on the deal signing function as chief guest.

He said power consumption in the country has increased in recent years due to high economic growth, widening the demand-supply gap.

Energy Adviser to the Prime Minister Dr Tawfiq-e-Elahi Chowdhury, State Minister for Energy and Mineral Resources Eng Muhammad Enamul Huq, Power Division Secretary Abul Kalam Azad, World Bank Country Director Ellen Goldstein and chairman of EGCB Ltd Nilufar Ahmed were also present at the function.

EGCB company secretary Kazi Nazrul Islam, ISOLUX Managing Director Jose Garrido and Samsung C&T Corporation General Manager Sungki Na signed the contract for their respective companies.

Terming the project as a “life support project” for the country’s power sector, Dr Tawfiq-e-Elahi Chowdhury said, “It is indeed a very auspicious occasion for us.”

The combined cycle power plant will contribute much to energy efficiency along with cutting fuel costs for power generation, Tawfiq said, adding that power will be a key issue in maintaining the country’s economic growth rate over six percent.

He said the government has been able to increase power generation up to 5,500MW, from around 3,500MW, after taking office.

During the period, the government had to give two millions new connections while the demand for power at industrial units also increased manifolds, Tawfiq added.

World Bank Country Director Ellen Goldstein said the Shiddhirganj power plant will be the most inexpensive and most reliable power plant in Bangladesh.

She also hailed the bidding and procurement process of the project.

The WB country director called for creating a level playing field in the sector to attract more foreign private companies to invest in Bangladesh’s power sector. Earlier, the WB had committed to provide $221.10 million to implement two units of peaking power plant at Siddhirganj, each with capacity of generating 150MW of electricity.

But it later disagreed on a proposal to procure equipments from German firm Siemens over graft allegations. The WB then proposed the government to turn the project into a 335-450MW combined cycle one and assured to provide the total fund required for the project.

According to officials, state-owned EGCB invited a tender in October 2010 for the 300-450MW Siddhirganj power plant.

The project, undertaken in 2004, was delayed due to a long procedure of tendering and re-tendering as the authorities failed to satisfy the WB.

A tender was first invited in 2009 when it was a 300-MW peaking plant project. But the EGCB had to cancel it in response to a WB suggestion.

Later, as per Power Division’s instructions and World Bank’s suggestions, the EGCB upgraded the project to a 335-450MW combined cycle power plant and floated a tender in November 2010.

The Daily Sun/ Bangladesh/ 29-May-2012