YOG INFRA Q1 2022 insights
BANGLADESH AND NEPAL saw subdued activity with regards to development of infrastructure and PPP projects. Development of cross-border electricity sales between Nepal and India is a positive push for further encouraging renewable energy mix in the country. Bangladesh, while growing economically, is yet to see resumption of PPP projects that were on hold due to COVID-19 pandemic.
Read more about key developments in Infrastructure and PPPs in the two countries in our latest insight.
NEPAL
NEPAL POWER EXCHANGE SIGNS TRADE AGREEMENT WITH INDIAN COMPANY
The Nepal Power Exchange (NPE) signed an agreement with Indian trading company Manikaran Power for selling electricity.
The exchange plans to sell about 500 MW of power generated by hydropower producers in Nepal to India via the trading company and the NPE expects to receive a commercial licence within the next two months. The amount of electricity sold may increase after 2022.
Manikaran will pick a 15% stake in the NPE which may increase. The Nepalese entity will always maintain a controlling stake.
NEPAL IMPACT FUND PLANS 30 MW CLEAN ENERGY INVESTMENTS
Nepalese private equity investor Dolma Impact Fund's second investment vehicle - Fund II - is planning to develop clean energy projects with a combined capacity of about 30 MW. The portfolio will include a 21 MW hydro project and the remaining will be utility-scale and rooftop solar installations for commercial and industrial customers.
CHINA ENERGY AND NEPALESE DEVELOPER FORM HYDROPOWER JV
Apollo Energy Private, a subsidiary of diversified Nepalese conglomerate Golyan Group has agreed to form a joint venture with two Chinese state-owned companies to build the 260 MW Namlan Khola hydro-power project.
Golyan group will collaborate with China Energy International Group Company and China Gezhouba Group Corporation International - both owned by China Energy Engineering Corporation.
The project is located in Nepal's Mugu district and will have a designed electricity output of 1.14 billion kwh.
The Chinese partners will provide the debt finance as well as involve themselves with the design, engineering, procurement and construction. Golyan will provide the equity funding and run the plant once construction is completed.
Bangladesh
CHINESE ENERGY ENGINEERING INTERESTED IN BANGLADESH SOCIAL INFRA PROJECTS
China Energy Engineering Corporation's (CEEC) international unit is interested in renewable energy and social infrastructure projects in Bangladesh. It is interested in opportunities in smart transportation, smart buildings, smart power, and smart cities. It is specifically keen to develop new urban districts.
The company, which provides design and consulting services in addition to development, is also keen on energy projects that can help reduce Bangladesh’s carbon footprint. Chinese developers are among the most active international infrastructure and energy developers in Bangladesh. China Machinery Engineering Corporation (CMEC) has planned to invest about USD 300 Mn to implement Bangladesh's first waste-to-energy project at Aminbazar.
AIIB CONSIDERS LENDING TO BANGLADESHI GAS POWER PLANT
A consortium of lenders including Beijing-headquartered Asian Infrastructure Investment Bank (AIIB) is planning to debt finance the development of a 584 MW combined-cycle gas turbine (CCGT) plant in Bangladesh.
The project - Unique Meghnaghat Power - will cost an estimated USD 549 Mn. The AIIB is considering lending USD 75 Mn. The other lenders will include development finance institutions and export credit agencies.
The project cost will comprise 75% debt, while the rest will be equity provided by the developers, which include Bangladesh's Unique Hotel and Resorts, sister company Strategic Finance, Qatar-based Nebras Power and GE Capital Global Energy Investment. Financial close is expected by July 2022.
Unique Meghnaghat Power will develop and operate the CCGT project at Pirojpur, Sonargaon, in Narayanganj district. It will be spread across 18.75 acres and will sell power to the Bangladesh Power Development Board through a 22-year power purchase agreement. The gas will be sourced from state-owned Titas Gas Transmission and Distribution Company.
BANGLADESH AND KOREA DISCUSS PPPS
The Public-Private Partnership Authority (PPP) of Bangladesh and the South Korean government are in discussions to evaluate eight infrastructure projects. These include a solar power plant, a metro rail line, a water supply project, and a community centre.
At the meeting with South Korean Minister of Land, Infrastructure and Transport Noh Hyeong-ouk, the two sides agreed that a South Korean consortium led by GS E&C will conduct a feasibility study to develop a power distribution line, the Purbachal New Town Power Distribution Network.
The project involves building and operating a smart power distribution management system for about 90,000 households in Purbachal New Town. The project is estimated to cost USD 700 Mn.
List of Key Transactions - Nepal Q1-2022
List of Key Transactions - Bangladesh Q1-2022
Source: Inframation, YOG INFRA analysis
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