Lakdhanavi Limited, which is the power generation arm of LTL Holdings Group, has been awarded another contract by the Bangladesh Power Development Board (BPDB) to construct a 114 MW thermal power plant using heavy fuel oil (HFO).
The contract was awarded through international competitive bidding on a build-own-operate (BOO) basis to supply electricity to the national grid of Bangladesh for 15 years.
The relevant letter of intent (LOI) was issued to Lakdhanavi Ltd on May 15, 2017. This will be the fifth power plant that will be built in Bangladesh by LTL.
Lakdhanavi is expecting to sign the relevant power purchase agreement (PPA) and implementation agreement (IA) with the BPDB and Bangladesh Power, Energy and Mineral Resources Ministry soon and complete the construction work within the prescribed tenure of 18 months.
The company expects to finance the project, which will require an investment of US $ 100 million approximately, through a project loan from international development finance institutions under very competitive terms and the sponsor’s equity contribution.
The operation costs of the power plant are planned to be kept at the lowest level through direct imports of HFO from international markets at competitive terms, which contribute to over 80 percent of the direct cost.
This latest contract is yet another feather in LTL’s cap, enhancing its standing as Sri Lanka’s largest internationally acclaimed electrical and heavy engineering power company.
LTL Group has been very active in the power sector of Bangladesh since 2010. Initially LTL secured two engineering, procurement and construction (EPC) contracts to build two 100 MW power plants for Orion Group of Bangladesh in Magnaghat and Shiddihrganj, respectively. Thereafter, Lakdhanavi Ltd secured two contacts in 2011 to construct power plants of capacity of 52.2 MW, each (Raj Lanka and Lakdhanavi Bangla) under a BOO basis in Natore and Comilla, Bangladesh through international competitive bidding, to supply electricity to the national grid of Bangladesh for 15 years under PPAs signed with the BPDB.
Lakdhanavi has set up two subsidiary companies in the names of Raj Lanka Power Company Ltd (RLPCL) and Lakdhanavi Bangla Power Ltd (LBPL) and completed construction on time and commenced commercial operations in 2014. The operation style of LTL of these two power plants has brought a paradigm shift in the power plant maintenance style among the private sector power plants in Bangladesh, which embraced the international best practices adopted by LTL. Now, these two facilities are considered as role model power plants in Bangladesh.
The justifiably proud LTL Group CEO U.D. Jayawardana said, “We have found an ideal market in Bangladesh for investment in power generation, with its huge supply-demand deficit, safe investment climate and an environment that welcomes IPPs as a concept to fill the shortages of local capital formation for infrastructure development.”
LTL has already designed, built and currently operates the 300 MW combined cycle power plant Yugadhanavi in Kerawalapitiya, the first private power plant in Sri Lanka, the 24 MW diesel power plant Lakdhanavi in Sapugaskanda (now decommissioned), the first IPP plant, the 100 MW Heladhanavi power plant in Puttalam (now decommissioned) and a 24 MW power plant in Chunnakam, Jaffna. LTL is also involved in renewable power as well having its own 15 MW wind power installations in Kalpitiya, Sri Lanka called Pavandhanavi.
It has also has several mini-hydro power installations in Sri Lanka, generation close upon a total of 5 MW under the name Nivindu. LTL has recently procured a 10 MW solar power installation in the Maldives.
In addition, LTL Holdings is also pursuing with a very large power generation project in Myanmar. The company’s transformer manufacturing plant, which was its pioneering venture in the early 1980s, today exports more than 50 percent of its distribution transformer manufacturing capacity to more than 30 countries in the world.