Revenue from Bangla project to come in from 2018: Rel Power

Reliance Power has signed an agreement with Bangladesh Power Development Board for setting up a 3,000 mw liquid gas-fired plant along with a floating terminal to import gas in ships to power the unit. The total investment will be USD 3 billion, Lalit Jalan, Group Director, Reliance Power told CNBC-TV18.

Below is the transcript of Lalit Jalan’s interview with Latha Venkatesh and Ekta Batra on CNBC-TV18.Latha: Can you take us through what this means financially to your company? A 3,000 megawatt would mean how much in terms of revenues and how much in terms of margins?A: This is a 3,000 megawatt power project. The capacity is going to be a liquefied natural gas (LNG) based combined cycle power project in Bangladesh. When we were looking at growth opportunities, we found natural fit in Bangladesh. Bangladesh is very power starved and they have limited gas and no coal. In their master plan 2010, they had planned for a large LNG based power project. We had already invested in world class equipment for our Samalkot project which owing to lack of gas, the Rs 8,000 crore (investment) was not productive. So, it was an excellent fit for us. It is a Rs 3,000 megawatt project near Dhaka. It will be based on imported LNG of floating storage and regasification unit (FSRU) of Maheshkhali Island in Cox’s Bazar District. The total investment will be to the tune of USD three billion. The timelines for the first phase will be 1,500 megawatts, which would be about three years from today. So middle of 2018.

Latha: I did not get you. You said Samalkot because of gas availability reasons was stranded. So, you used the equipment that you imported for Samalkot for this plant? This is so easily dismantleable, is it?A: Yes, most of the equipment is lying in crates since gas was not available, the equipment is lying at site.Latha: And is it a long distance? Will there be costs involved in the transportation? A: It is fairly easy. This is fully covered under appropriate vendor guarantees. The transport cost would be very negligible in a project of this size.

Sonia: Since a large part of your capital expenditure (Capex) seems to be done for this, can you just tell us what the total project would eventually cost for this transfer of equipment and how would it be funded? Is there any funding which both the governments would undertake?A: We have invested around Rs 8,000 crore for our Samalkot project, so that investment is already done. This total project is Rs 18,000 crore. So, it entails an additional investment of about Rs 10,000 crore. So, the financial closure of this will happen once we get all the land and the plant protection adviser (PPA) clearances and the tie up for the LNG and everything.