Daelim Energy said on April 29 that it has signed a stock sale deal with Energypac, a Bangladeshi private power company, on the Thakurgaon engine power generation project.
Daelim Energy has been pushing ahead with the project since November 2017 with Energypac and decided on the final investment after about a year and a half of business development. It will sign an EPC contract this month and begin construction of the power plant for commercial operations in March 2020.
Daelim Energy will invest $16 million in capital through its subsidiary EMA Power Investment to secure a 49 percent stake and participate in operations and management.
EMA Power Investment is an investment entity established in Dubai in April 2016 by IDB Infrastructure Fund II, which was established by the Islamic Development Bank, and Daelim Energy.
The Thakurgaon engine plant will be built in the northern city of Thakurgaon in Bangladesh and has a power generating capacity of 115 MW.
A 15-year power purchase agreement (PPA) has been signed with Bangladesh's Power Authority, enabling stable electricity sales. In addition, Energypac and Daelim Energy plan to reduce costs and maximize profits by directly sourcing heavy fuel oil.
Daelim Energy had previously invested in Summit Power International, Bangladesh's largest private power operator, in August 2016.
"Bangladesh is a growing country where electricity demand is expected to rise 6.9 percent annually due to a high economic growth rate of about 7 percent. In addition to this project, additional ones are being developed in Bangladesh," said a company official.