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Mar 95 min read

Bhola 225 MW (NBBL) Dual Fuel Power Plant

Current Status: Operation

Source: AIIB


Bhola 225 MW Dual Fuel Power Plant, also known as Bhola IPP or Bhola-II in short, is a Combined Cycle (CC) power plant situated on the bank of Dehular Khal at South Kutba village under Burhanuddin Upazila in Bhola District of Bangladesh (Location: 22.4789, 90.7102). It is sponsored by Nutan Bidyut Bangladesh Limited (NBBL), a Special Purpose Vehicle (SPV) of Shapoorji-Pallonji Group (SP Group), as a private Independent Power Producer (IPP) for 22 years. After selling 49% of shares to Actis Group, SP Group owns 51% of NBBL now. NBBL declared its Commercial Operation Date (COD) on 9 June 2021 and, as per schedule, the power plant is to retire on 8 June 2043.


Capacity

The installed (gross) and derated (net) capacity of the power plant is 225 MW and 220 MW respectively.


Context

In 2016, Nutan Bidyut (Bangladesh) Limited (NBBL) secured the contract to construct, plan, finance, possess, run, and manage a 225 MW combined cycle power plant (CCPP) in the Bhola District of Barisal Division that operates on dual fuel, achieved a 22-year Power Purchase Agreement (PPA) with the Bangladesh Power Development Board and was successfully commissioned in June 2021 (DT,2022). 

The power plant was executed by Shapoorji Pallonji Infrastructure Capital Company Private Limited through Nutan Bidyut (Bangladesh) Limited, a specialised entity established solely within the country to undertake the project's development (FE,2018). GE Power, a company from the United States specialising in energy techniques, has entered into a five-year maintenance agreement with the Bangladesh Power Development Board (BPDB). This contract involves providing services and maintenance to the power plant (NS Energy, 2019). 

The project aims to augment Bangladesh's power generation capacity, addressing the nation's power scarcity and aiding in meeting the increased demand for electricity (China Daily ,2018). The electricity produced by the project is currently being sold to the Bangladesh Power Development Board (BPDB) through a Power Purchase Agreement (PPA) that spans a period of 22 years.  (IDCOL ,2021).


Land Acquisition

The power plant is located on the eastern side of Dehular Khal and accessible through the Charfassion-Bhola Highway Road (R890). The project site is around 3 kilometers from Borhanuddin town and approximately 28 kilometers north of the Bhola District Headquarters with 18.78 acres area  (IDCOL ,2021). In another document it is 22.78 acres fifty percent of the ownership rights have been transferred to NBBL through a long-term lease by BPDB (AIIB,2018).


Contractors

The Shapoorji Pallonji Group (SP Group) has chosen GE to provide the power generation machinery for this power plant (GE,2017). General Electric supplied equipment for the power plant, including two 6F.03 gas turbines, two heat recovery steam generators (HRSG), one steam turbine generator, condenser and associated control systems.


Finance

The estimated budget of the power plant was USD 269 million, of which USD 180 million loans and USD 89 million equity. Out of the total loan, Asian Infrastructure Investment Bank (AIIB) provided USD 60 million as the lead financier. In addition, both the Islamic Development Bank (ISDB) and Infrastructure Development Company Limited (IDCOL) provided USD 60 million each.


In January 2020, SP Group appointed Standard Chartered Bank (SCB) to find a suitable buyer for the power plant (Mint 2020). After a long negotiation, the sponsor sold 49% of NBBL for USD 450 million to Bridgin Power Private Limited, a subsidiary of Mauritius-based Actis Ambergen 2 Limited and UK-based Actis Energy 5B Limited. 


Shearman & Sterling worked as financial advisors for refinancing institutions (Sherman 2022). The Multilateral Investment Guarantee Agency (MIGA) gave a non-commercial risk guarantee of USD 457.9 million for new sponsors and financiers (MIGA 2021). Bank of China Limited (BOC), Development Bank of Singapore Limited (DBS), Internationale Nederlanden Groep (ING Bank), Mizuho Bank Limited, Societe Generale, and Sumitomo Mitsui Banking Corporation (SMBC) financed Bridgin Power to acquire the share.


Fuel Supply

The power plant uses Domestic Fossil Gas (DFG) as the primary fuel and High-Speed Diesel (HSD) as the secondary fuel. 


Environment

Environmental Resources Management (ERM) India Private Limited conducted the Environmental and Social Impact Assessment (ESIA) of the project. According to the ESIA Report, the power plant will use 397 cubic meters (389.86 tonnes) of water per hour from Dehular Khal. Accordingly, the power plant will use 3.42 million tonnes of water annually and 75.13 million tonnes in 22 years of operation. The power plant has been classified as a high-risk project, necessitating substantial compliance measures to ensure safety. This includes conducting a thorough environmental impact assessment and implementing consistent monitoring procedures.


Criticism

Under the Environment Conservation Rules (ECR) of 1997, the project falls under the Red1 category, indicating that it possesses considerable adverse environmental effects. As per this categorization, appropriate mitigation measures need to be implemented to address these impacts adequately (IDCOL ,2021). Some households have physically relocated due to the construction of this power plant.


References

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