Malaysia, Bangladesh Sign RM6 Billion Power Plant Deal

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KUALA LUMPUR, Sept 23 –  Malaysia and Bangladesh signed a government-to-government Memorandum of Understanding (MoU) for Tenaga Nasional Bhd (TNB) and Powertek Bhd to implement a RM6 billion power plant project. The MoU paves the way for the TNB-Powertek consortium to finance and build a 1,320-megawatt coal-fired power plant in Maheshkhali, Cox’s Bazar, Bangladesh with the Bangladesh Power Development Board (BPDB).

The TNB-Powertek consortium and BPDB would have equal equity shareholding in the power plant, Malaysia’s Special Envoy for Infrastructure to India and South Asia, Datuk Seri Utama S. Samy Vellu, who signed behalf of the Malaysian government, said. Bangladesh’s State Minister for Power, Energy and Mineral Resources, Nasrul Hamid signed on behalf of his government. Following the signing of the government-to-goverment MoU on Monday, TNB, Powertek and BPDB signed an MoU on their partnership.

Elaborating on the details of the MoU, Samy Vellu said it was valid for two years unless extended by mutual agreement or when the parties sign a definitive joint venture (JV) agreement/shareholder agreement in relation to the project development. “With this MoU, the parties will jointly conduct a project feasibility study and come up with proper project development programme,” he said after the signing ceremony.

If the parties decided to go ahead with the project, after the completion of feasibility study, they will form a JV company and conduct international tender to appoint the engineering procurement and commission (EPC) contractor for the project. The TNB-Powertek consortium would provide the technical leadership and coordinate the feasibility study of the project whereas BPDB would provide the land for the project, he said.

The project would be developed on a non-recourse financing basis and the JV company would sign a long-term power purchasing agreement with BPDB as the sole off-taker of power from the project, said the minister. On the project’s timeline, Samy Vellu said the feasibility study was expected to take place within six to nine months, tender for EPC contract (3-6 months), completion of project documentation to achieve financial close (9-12 months) and construction would take four years. Coal for the project would be sourced from the region namely Indonesia and South Africa subject to the feasibility study, he added.

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