Asia Energy to build 1,000 MW Bangladesh power plant

DHAKA (Reuters) - Asia Energy Corp (Bangladesh), sister firm of UK-based GCM Resources PLC, has proposed to build a 1,000 megawatts (MW) power plant using coal from Bangladesh's northwest field, a senior energy official said on Saturday.

The firm submitted a plan to the Bangladesh government to develop a coal mine at the field at Phulbari, 350 km (220 miles) northwest of the capital Dhaka, using open pit mining technology.

"We have received the proposal (for the power plant) through the board of investment, but before giving them any green signal, we need to get an approved national coal policy," the government official said.

A committee appointed by the ministry of power, energy, and mineral resources submitted a draft coal policy to the government last week for approval.

"Bangladesh is facing a recognised shortage of energy and power and the situation is worsening, ... and coal-fired power stations are being seriously discussed by the government and people," said Gary Lye, chief executive officer of the Asia Energy Corp (Bangladesh).

Bangladesh faces a power deficit of up to 2,000 MW against demand of 5,000 MW daily, energy officials said.

Frequent power failures cut the country's gross domestic product by around $1.0 billion annually, the World Bank said, and would need $10 billion invested over the next 10 years to overcome the shortages.

Asian Development Bank had said they would assist the authorities to build power plants to generate 2,000 MW at Phulbari.

"Before financing to a major power station, one needs to have a fuel supply guarantee. With the plus 35 years life span of the Phulbari Coal Project, Asia Energy is in a position to offer such a guarantee," Lye told Reuters.

Asia Energy mining company is lining up an offer to invest $3.0 billion in a Bangladesh coal project, which can produce 15 million tonnes of coal a year and can give the state $7.8 billion in revenues over 30 years, Lye said.

"We are ready to start work as soon as we receive green signal from the authority," he added.

During the feasibility study in 2004-2005, Asia Energy drilled 108 holes and defined resource of 572 million tonnes of high quality coal at the Phulbari coal basin project.

The current coal reserve in the country's five coal-fields is around 2.55 billion tonnes, including Phulbari, officials said.

Experts said gas reserves in the country were fast depleting, so its power plants should be coal-based.

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