ADB approves USD 583 mn loan facility to Reliance Power's project

New Delhi: Reliance Power on Tuesday said Asian Development Bank (ADB) has approved debt financing and partial risk guarantees totalling USD 583 million to develop its 750 MW power plant and LNG terminal project in Bangladesh.

"The Board of Asian Development Bank (ADB) has approved debt financing and partial risk guarantees totalling USD 583 million (approx Rs 3,748 crore) for 750 MW LNG based combined cycle power plant and LNG Terminal project being developed by the company's subsidiaries in Bangladesh," Reliance Power said in a BSE filing.

The project, which includes a power generation facility to be located in Meghnaghat near Dhaka and an LNG Terminal near Kutubdia Island south of Chittagong, will significantly increase power generation and improve energy infrastructure in Bangladesh, ADB said.

ADB's financing package includes loans and partial risk guarantees for the power generation facility, as well as for the LNG terminal. Total project cost is approximately USD 1 billion.

ADBs partnership with Reliance Power will help Bangladesh scale up its energy infrastructure to sustain and support the countrys economic growth. Said Michael Barrow, Director General of ADBs Private Sector Operations Department.

ADBs role as a direct lender and guarantee provider will enable Reliance Power to mobilise much needed long-term debt financing and help attract new lenders to Bangladesh.

Reliance Power in a statement said that diversifying Bangladeshs sources of energy is critical for the country as demands for natural gas have placed significant pressures on the country's domestic gas reserves.

New LNG import facilities will enable the country's existing gas-department infrastructure to remain viable while opening the country to access natural gas from global markets, it added.

The company further said that the ADB's support will help Reliance Power Ltd to develop an initial approximately 750 megawatts (MW) of gross power generation capacity and terminal facilities for LNG import. Reliance Power plans to increase its power generation capacity to around 3000 MW in Bangladesh.

Energy from the power plant will be sold to the country's electricity grid under a long-term power purchase agreement with the Bangladesh Power Development Board.

"Reliance Power has achieved a major and important milestone of approval of financing for its landmark project in Bangladesh. This is an important step in helping Bangladesh achieve energy security," said Venugopala Rao, the CEO of Reliance Power.

Shares of the company were trading 0.27 per cent lower at Rs 36.65 on BSE this afternoon.