Summit Power said it signed deals with the Bangladesh Power Development Board (PDB) on Thursday to build three power plants over the next three years with a total generation capacity of 1,017 megawatts. "We will be able to implement three projects with a cost of about $1.1 billion by the year 2014," said Muhammad Aziz Khan, chairman of Bangladeshi conglomerate Summit Group.
The deal also calls for Summit Power, a joint venture between Summit Group and General Electric, to operate the plants and supply electricity to the PDB over the next 22 years. "During this period, the government will buy more than $5.1 billion worth of electricity from these three plants," Aziz said at a signing ceremony. The Bangladeshi government is working on a plan to generate 9,000 MW of electricity by 2015 to tackle power shortages that often lead to public protests. The impoverished country faces a daily shortfall of 2,000 MW, and the gap is widening. The three Summit projects are the biggest private sector contracts so far in the country.
To finance the projects, Summit Power will look to international lending agencies to provide debt financing and will also consider issuing shares on the stock market to raise equity financing, Aziz said. Bangladesh, whose economy has grown on average by 6 percent per year since 2003, has seen power demand sharply outstripping supply, resulting in frequent cuts and economic losses estimated at nearly $1 billion a year.
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