Bangladesh set to ink deal with Indonesian co next month

Source:The Financial Express Bangladesh Published: 2019/5/24 10:02:21

Bangladesh is set to sign a maiden deal with an Indonesian company next month to import coal for generating electricity in the 1320-megawatt (MW) coal-fired thermal power plant at Payra in Patuakhali.

Bangladesh-China Power Company Limited (BCPCL), the executing agency of the power plant, will ink the deal with Indonesian coal supplier, PT Bayan Resources, by early next month, BCPCL managing director AM Khorshedul Alam told the FE on Thursday.

"First-ever coal cargo for electricity generation is expected to reach the country in July next," he said.

Apart from the Indonesian firm, the Bangladesh-China joint venture company would also import coal from Australian coal supplier Yancoal.

A memorandum of understanding (MoU) has already been inked with Yancoal to import coal.

The 1320-megawatt thermal power plant would be first to be run on imported coal.

To run the US$ 1.98 billion worth coal-fired power plant, around 4.0 million tonnes of coal would be required to import.

BCPCL would import coal, having linked with the international Newcastle coal price index.

The BCPCL official, however, did not disclose the coal price.

The first unit having 660MW capacity at the Payra coal-fired power plant would go into operation by December 2019 and the second one having the same capacity by June 2020.

To run one unit, some 180,000 tonnes of coal will be required every month.

Initially, BCPCL has planned to import coal directly from Indonesia with half-loaded Supramax coal having the volume of around 25,000 tonnes per cargo.

After successful construction of transhipment facility in the Andaman, mother cargo would be able to carry coal for the power plant, said a company official.

BCPCL is a 50:50 joint venture between Bangladesh's North-West Power Generation Company Ltd (NWPGCL) and China's China National Machinery Import and Export Corporation (CMC).

The proposed power plant is some 320 kilometres south of Dhaka and close to the proposed Payra seaport.

BCPCL has been providing 20 per cent equity to implement the power plant project and the remaining 80 per cent is being sourced as loan from Exim Bank of China.

The power plant would require around 12,000 tonnes of coal daily to generate electricity.

The government has issued a US$ 1.0 billion worth of state guarantee in favour of Chinese loan for implementing the power plant project.

It has allocated 998.77 acres of land to NWPGCL for implementing the project on a turnkey basis by using eco-friendly ultra supercritical technology.

The country would start importing a huge quantity of coal only due to non-availability of local coal.

Currently, the country has five coalmines, but coal extraction is limited to only one coalmine at Barapukuria in Dinajpur, utilising the underground coalmining method.

Barapukuria Coal Mining Company Ltd (BCMCL) is annually extracting around 1.0 million tonnes of coal, most of which is consumed by nearby Barapukuria thermal power plant.

According to the power system master plan, the government has a plan to generate around 50 per cent of the country's overall electricity from coal, officials said.

To implement the plan, the government will have to generate around 12,000 megawatts (MW) of electricity from coal by 2024, 20,000 MW by 2030 and 30,000 MW by 2041.

But currently, the country has only three coal-fired power plants having the total generation capacity of only 524 MW, against the total installed capacity of 17,685 MW.

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