Midland Power signs deal with Chinese company to build power plant - Share market analysis of dhaka stock exchange, Bangladesh

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14 September, 2017 10:07 AM Source: The Daily Star Bangladesh

Local Midland Power has awarded the Chinese power giant CRRC Corporation to construct its second power plant, the 150-megawatt Midland East, at a cost of $40 million.

An engineering, procurement and construction agreement will be signed with CRRC on Saturday in Dhaka, said KM Rezaul Hasanat, chairman of Midland Power, joint venture of Viyellatex Group and Shahjibazar Power.

After discussions with four international companies, the Midland management decided to strike the deal with CRRC as the Chinese company offered the most competitive rate, Hasanat said.

Under the agreement, CRRC will construct the plant, procure the machinery and set them up.

The plant, which would be constructed on nine acres of land at Ashuganj in Brahmanbaria district, would cost $110 million.

Of the costs, Hasanat said 80 percent would come from local Eastern Bank and the remaining 20 percent from Viyellatex Group and Shahjibazar Power.

Hasanat and his partnering company Shahjibazar Power, a sister concern of Youth Group, a leading garment exporter, have 50-50 ownership in the proposed power plant.

The plant is scheduled to go into operation by May next year.

Midland East Power Plant has already signed a 15-year agreement with the government to supply the power produced at the plant to the national grid at a cost of 10.5 cents a kilowatt hour. The Midland management signed an agreement worth $52 million with the UK-based Rolls-Royce for supplying machinery for the plant in August 23 in Dhaka.

Midland Power is an independent power producer and has been supplying 51MW to the national grid since 2013.

Like the two groups, many other garment exporters have also been investing money in the power-generation business.

The government has been purchasing power from the independent power producers to meet the growing demand in the industrial sector and for individual household consumption.

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