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DHAKA (Reuters) - Bangladesh's leading privately held electricity provider, the Summit Group of Companies, plans to build a power plant in Bhutan, Chairman Muhammad Aziz Khan said on Sunday.
"At the moment we are surveying to identify the bottlenecks and potentials to set up a power plant in Bhutan with 500 megawatts capacity," Khan told Reuters in an interview.
He said that Bhutan was a potentially rich source of hydro power and added: "If we could reap the potentials, then Bangladesh would be able to meet up its much needed electricity requirements."
Summit plans to produce an additional 750 megawatts of electricity with imported liquefied natural gas over the next three to four years, and produce another 676 megawatts (MW) of electricity by the year 2014.
"We have already signed a deal with Chinese firm First Northeast Electric Power Engineering Company (NEPC) on Engineering, Procurement & Construction for about $220 million for implementation of the Bibiyana 341 MW combined cycle power project," Khan said.
The Bibiyana combined cycle power project will generate 341 MW of electricity by June 2014 at the lowest tariff of 1.90 taka per KW hour, Khan said.
Bibiyana is located at Sylhet, 278 kilometres (174 miles) northeast from the capital city of Dhaka.
The project's gas turbine will be supplied by U.S. firm General Electric (GE.N).
Earlier Summit signed two separate deals with GE and NEPC to install a duel fuel power plant of 335 MW at Meghnaghat, near Dhaka.
Khan said the two the projects would have a combined generating capacity of 676 MW by 2014.
"These will greatly help alleviate the electricity shortage," Khan said.
Summit has invested more than $1 billion in the power sector and is supplying 600 MW of electricity to the national power grid.
Bangladesh suffers from chronic power shortages of up to 1,000 MW per day, which constrains growth and discourages investors.
Reporting by Serajul Quadir; editing by Jason Neely