Two leading Indian power firms will build plants in Bangladesh to produce up to 4,600 megawatts of electricity to ease the country's prolonged power crisis, a senior official said on Saturday.
Adani Power Limited and Reliance Power Limited signed separate memorandums of understanding with state-run Bangladesh Power Development Board (BPDB) on Saturday, as Prime Minister Narendra Modi began a two-day state visit.
"Reliance Power and BPDB today signed a MOU to develop four units of power plants to produce 3,000 MW of electricity with a cost of $3 billion," the company said in a statement. The plants will burn natural gas.
Adani Power will set up two, coal-fired plants with a total capacity of 1,600 MW that will cost more than $1.5 billion.
Officials of the firms said it would take 13 months to complete construction of the plants after final agreements had been reached.
"Discussions are going on to settle the details of the plants," said Mohammad Saiful Islam, a director of BPDB.
Bangladesh produces 7,000 MW of electricity but demand far exceeds supply, with a daily deficit of up to 1,500 MW.
The government on Thursday unveiled a 2.95 trillion taka ($38 billion) budget for fiscal 2014/15, stepping up spending on key sectors to tackle power shortages that are crimping economic growth and deterring investment.
Spending on development needs such as power and transport will rise about 40 percent from the current fiscal year to 263 billion taka ($3.4 billion), Finance Minister Abul Maal Abdul Muhith told parliament, while overall spending will increase 23 percent in the year from July 1.
Foreign Minister Abul Hassan Mahmood Ali told journalists on Friday that Bangladesh also planned to more than double its electricity imports from India to 11,000 MW by 2017 from 5,000 MW now.