India Beats China to $1.5 Bln Project in Bangladesh

© AP Photo / Andy WongAn Indian national flag is flown next to the Chinese national emblem. (File)
An Indian national flag is flown next to the Chinese national emblem. (File) - Sputnik International
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India’s Bharat Heavy Electricals Limited (BHEL) has started developing the $1.5 billion Maitree Super Thermal Power Project in Bangladesh, aided by loans from India’s Exim Bank. The bank was able to lend the money after the Indian government changed laws to allow funding to Indian firms for projects abroad to beat competition from China.

Indian Prime Minister Narendra Modi (R) and Bangladesh Prime Minister Sheikh Hasina jointly inaugurate a major road named after Bangabandhu Mujibur Rehman during an agreement signing ceremony after a meeting in New Delhi on April 8, 2017 - Sputnik International
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New Delhi (Sputnik) — The project marks a major diplomatic victory for Indian Prime Minister Narendra Modi who took a personal interest in it. Initial bidding rules made eligible only manufacturers from China, Korea, Japan and Europe as BHEL, India's largest manufacturer of power equipment, did not have 500MW operational unit overseas as per the requirement for the bidding.

To win the large project in its neighborhood and to counter aggressive Chinese companies, the Indian government made changes in the law and allowed Exim Bank to offer concessional finance to Indian companies bidding for strategically important projects abroad. After the diplomatic intervention, BHEL won the bid for the project. Part of the interest on the loan for this project will be borne by the government.

On April 11, an agreement was signed with Exim Bank to provide loan up to US$ 1.6 billion for financing the 1320MW Maitree Super Thermal Power Project. The project is located at Rampal in Bagerhat District of Khulna division in Bangladesh.

"Bangladesh-India Friendship Power Company (Pvt.) Limited (BIFPCL), a 50:50 Joint Venture Company between NTPC Limited and Bangladesh Power Development Board (BPDB), has issued Notice to Proceed (NTP) to BHEL for executing the contract for 1320 MW (2 x 660 MW) Coal-based Maitree Super Thermal Power Project," a National Thermal Power Corporation statement said.

Bangladesh’s Prime Minister Sheikh Hasina shakes hand with Indian Prime Minister Narendra Modi - Sputnik International
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BHEL's scope of work includes design, engineering, manufacture, supply, construction, erection, testing and commissioning of 2x660 MW thermal sets with ultra-supercritical parameters on turnkey basis. The scope also includes setting up of a jetty and a river water intake system. BHEL is India's largest manufacturer of power generation equipment with a formidable installed base of over 1,70,000 MW of power plant equipment globally.

Earlier this month, India signed a bilateral agreement to build a 131-kilometer pipeline to carry diesel and natural gas to Bangladesh at a cost of $46 million. The Indian government will bear all the expenditure for the pipeline.

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