Orion Power starts with own funds

2 Coal-Based Plants
Set to procure two generators; move on to collect funds to meet rest of the project cost
Orion Power will spend $37 million from its own funds in mid-April for down payment on two boiler turbine generators for two large coal power plants in Munshiganj and Mongla.

Orion is getting one of the generators for $189 million from Alstom of France and the other from US giant GE along with Doosan, a Korean company, for $193 million.

The down payment would initiate the installation process of the generators, the hearts of the private power plants.

Director Salman Karim of Orion Power told The Daily Star that his company would also make similar down payments to Doosan for engineering, procurement and construction of the two 630 megawatt plants at Gazaria of Munshiganj and Mongla in Bagerhat.

Orion, which has the experience of launching a few rental power projects, still has to collect the staggering $1.65 billion it needs to get the biggest private power plants of the country going.

“We have received Letter of Intent for getting 80 percent of the project cost from Korean Exim, US Exim and Chinese Sinosure,” Karim said.

These three financing institutions would clear the finances once Orion gets the environmental impact assessment clearance from the Department of Environment. “Once we get the environmental clearance, we hope to get our financing done quickly,” he said.

“We have hired AECOM of the USA to conduct the studies as it has vast experience with environmental studies for coal-power plants,” the Orion executive said, adding, “The AECOM is set to submit the assessments by April 15.”

Both the power plants, to be fuelled by coal imported from Indonesia, are expected to come into full operation in March 2016.

Salman Karim said Orion, in full swing, was developing 303 acres of land at Gazaria of Munshiganj and 210 acres in Biddyarbaon of Mongla near the Rampal project site.

Orion had won contracts through open tenders for three coal-fired power projects in Dhaka, Khulna and Chittagong divisions in 2012. The Khulna and Chittagong plants were 300MW each but were later merged into one 600MW project considering coal transportation and land acquisition hassles.

When Orion got the jobs, many industry insiders had expressed doubts about the company’s ability to implement the projects because of the high cost involved and the hassle in importing coal. They also termed Orion’s price offer of Tk 3.78 per kilowatt-hour from Khulna and Chittagong and Tk 4.3 per kilowatt-hour from Gazaria for 25 years too low to make the projects viable.

According to Salman Karim, both the projects were viable if they were implemented carefully. He said his company had hired all globally renowned legal, financial and logistic advisers and engineers to implement the projects flawlessly.

The company has given to the government a $40 million bank guarantee for the projects.


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