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Meghnaghat 584 MW (Unique) LNG Power Plant

  • 5 days ago
  • 7 min read

Current Status: Operation


Meghnaghat 584 MW LNG Power Plant, also known as Meghnaghat 584 MW Gas Power Plant or Unique Meghnaghat 584 MW Power Plant or simply Unique Meghnaghat Power Plant, is a Combined Cycle (CC) power plant situated in Dudhghata, Korbanpur, and Chanderchak villages of Pirojpur Union under Sonargaon Upazila in Narayanganj District of Bangladesh (Location: 23.6093, 90.6019). It is sponsored by Unique Meghnaghat Power Limited (UMPL), a joint venture company (JVC) of Unique Group, General Electric (GE), Nebras Power and Strategic Finance Limited (SFL), as a private Independent Power Producer (IPP) for 22 years. The Power Plant commenced its Commercial Operation Date (COD) on 20 January 2024 after successful commissioning and grid synchronization and will retire in March 2046 (বিউবো 2026).


Capacity

The installed (gross) and derated (net) capacity of the power plant is 600 MW and 584 MW respectively.


Context

On the right bank of the Meghna River in the Pirojpur Union under Sonargaon Upazila of Narayanganj District, are the villages of Dudhghata, Korbanpur, and Chanderchak, where the Meghnaghat 584 MW Combined Cycle Power Plant (CCPP) is located. The project area is close to the Dhaka-Chittagong highway in Sonargaon and the bank of Meghna river (Dhaka Tribune, 2014). 


Unique Hotel and Resorts Limited (UHRL), General Electric (GE), Nebras Power, and Strategic Finance Limited (SFL) are the sponsors of the power plant's operator, Unique Meghnaghat Power Limited (UMPL), which is also the company that owns the power plant. The two sponsors of the Unique Meghnaghat Power Limited (UMPL) are UHRL and SFL, seized 21.07 acres of land from local farmers in three villages at a variety of prices that did not line up with the going rate on the market or the terms of Bangladesh's 2017 Acquisition and Requisition of Immovable Property (ARIP) Act. 


In accordance with Bangladesh's Private Sector Power Generation Policy and making use of the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010, UHRL intended to construct a 600 MW CCPP on a Build-Own-Operate (BOO) basis in January 2018 (Dhaka Tribune, 2018). In order to carry out the power plant project, the Group established a new business UMPL, in September 2019 as a Special Purpose Vehicle (SPV) under UHRL (UHRL, 2021). The CCGP approved the proposal on 30 May 2018 (Daily Star, 2018). 


As a result, on June 25, 2018, the Bangladesh Power Development Board (BPDB) issued a Letter of Intent (FE 2018), and on July 24, 2019, they signed a Power Purchase Agreement (PPA) for a period of 22 years starting on the Commercial Operation Date (COD). In order to move the generated electricity, UHRL and Power Grid Company of Bangladesh Limited (PGCB) also signed an Implementation Agreement (IA) (Daily Star, 2019). On the same day, Petrobangla's subsidiary Titas Gas Transmission and Distribution Company Limited (TGTDCL) signed a Gas Supply Agreement (GSA) to provide 96.19 Million cubic feet (Mmscf) of DFG or LNG daily (UMPL 2022a,p 61). Within 36 months of the PPA's signature, the power plant must begin operating commercially. As a result, the power plant's original COD of 31 March 2022 which was later revised to 31 July 2022 due to a delay in the construction process (UHRL, 2021). 


Through a Statutory Regulatory Order (SRO) issued on 2 January 2020 under the Income Tax Ordinance of 1984, the UHRL is attempting to ensure COD before 31 December 2022 to benefit from the exceptional 15 years of tax exemption provisions provided to the Independent Power Providers (IPP) (Independent, 2020). The Department of Environment (DOE) granted the UMPL site approval and environmental clearance on October 1 and July 19, respectively (UMPL 2022a). The power plant has an installed capacity of 600 MW, but it will only produce 588.32 MW net before shutting down and evacuating to a nearby Power Grid Company of Bangladesh Ltd (PGCB) transmitting substation in the Meghnaghat area (UMPL 2022a, p 78). 


Land Acquisition

Initial reports state that locals sold 18.75 acres of land to UHRL and SFL (Daily Star, 2019). However, the ESIA report refers to the project's total area as 21.07 acres, of which 19.02 acres are designated as agricultural land and 2.05 acres as homesteads (UMPL 2022a, p93). On the other hand, it is clear from data from Google Earth on April 29, 2022, that the Meghnaghat 584 MW CCPP has occupied at least 27,95 acres of land along the Meghna river's bank (BWGED, 2022).



Finance

The project initially had a budget of BDT 4,368 crore (USD 515.7 million) with significant bank loans, but it underwent two budget adjustments, reaching USD 613 million (BDT 6,117.867 crore). Additionally, it secured loans from Infrastructure Development Company Limited and the Asian Infrastructure Investment Bank, increasing its funding to USD 110 million (BDT 1,205.49 crore) by November 2022 .


Sponsor

It is sponsored by Unique Meghnaghat Power Limited (UMPL), a joint venture company (JVC) of Unique Group, General Electric (GE), Nebras Power and Strategic Finance Limited (SFL) (UMPL 2022a).According to its report for the fiscal 2022-2023, the publicly listed Unique Hotel and Resorts holds a 37.24% stake in the project while Strategic Finance holds 38.76% and Nebras Power Investment Management holds 24% (Business standard, 2024). 


Contractors

GE (General Electric Company) will serve as the project's engineering, procurement, and construction (EPC) contractor and build it on a turnkey basis for US$350 million (BDT 3,835.65 crore). To carry out the project, GE will provide a 9HA gas turbine with the newest technology (FE, 2019).


Fuel Supply

Local gas or RLNG will be provided to the power plant by the government-run Titas Gas Transmission and Distribution Company Ltd (TGTDCL). Petrobangla, had signed a gas supply agreement for the plant in July 2019, but until adequate gas is available it has no obligation to supply gas to the plant. There is no certainty that it will get its requisite supply of gas to start operating.


Power Generation

When producing electricity with gas, a kilowatt-hour (kW/h) of power will cost 3.6923 cents or Tk 2.9538, whereas when using RLNG, the tariff will be $6.8098 cents or  BDT 5.4478 (Daily Star, 2018). The Unique Meghnaghat Power Plant will generate energy at a cost of at least BDT 19.10 (USD 0.21 ) per unit. 6.875 cubic feet of gas will be used by the power plant to produce each kilowatt-hour (kWh) of electricity. The Meghnaghat 584 MW LNG power plant generates approximately 12.34 GWh of electricity per day (BPDB, 2026). 


Environment

According to Section 12 of the Bangladesh Environment Protection Act 1995, Environmental Impact Assessment (EIA) is obligatory for any industry (MOLJPA 1995). Polluting industries, such as power plants, must undergo an Initial Environmental Examination (IEE) and EIA as directed in the Environmental Conservation Rules 2017 (MOEFCC 1997). But, to date, an IEE or EIA report has yet to be conducted for the power plant. The construction of a power plant by UMPL without environmental clearance has led to adverse effects on local communities, including sand accumulation on farmlands, displacement of villagers, and property damage without compensation. This project contradicts Bangladesh's goal of achieving 100% renewable energy by 2050, as outlined in the Mujib Climate Prosperity Plan (MCPP), due to its extended technical lifespan, posing a significant obstacle to the country's renewable energy transition. Bangladesh, a minor contributor to global greenhouse gas emissions, is dedicated to climate change mitigation. They face resource limitations and high costs in pursuing renewables, so they prioritize efficient gas usage crucially, the project aligns with the Paris Agreement and promises a net positive CO2 reduction over its lifespan. Environmental assessments in recent sector planning documents highlight that improving efficiency in gas-based plants is currently a key strategy to reduce overall emissions intensity while renewable capacity expands (MOEFCC, 2026). 


Capacity Charge

Under the Power Purchase Agreement (PPA), the Meghnaghat 584 MW LNG Combined Cycle Power Plant will receive a huge capacity payment. Based on estimated calculations, the annual capacity charge is approximately BDT 1,059 crore at 90% PLF, BDT 765 crore at 65% PLF, and BDT 471 crore at 40% PLF. Over the 22-year tenure , total capacity payments could range from approximately BDT 10,354 crore to BDT 23,298 crore, depending on the plant's load factor.


Carbon Footprint

One prominent initiative is a 584 MW CCGT project with a GE 9HA.01 gas turbine, boasting high efficiency (~64%). It aims to reduce emissions, with an estimated factor of 335.66 gCO2/kWh compared to the national grid's 412 gCO2/kWh (AIIB, 2022). But according to secondary sources the emission would be 614.96 g/kWh for this power plant. According to the PPA, if the power plant were to become operational, it would release between 20.23 and 66.04 million tonnes of CO2 throughout the 22-year period during its lifetime (BWGED, 2022).


Criticism

In Bangladesh, the power sector's capacity is 22,512 MW, but the demand is only 14,782 MW, leaving 34.3% idle capacity. Petrobangla's gas supply shortfall and high costs create uncertainty for the Unique Meghnaghat Power Plant. Its generation cost is at least BDT 19.10 per unit, far higher than solar power at BDT 6.37. The plant's gas consumption leads to substantial CO2 emissions, conflicting with Paris Agreement goals. Land acquisition issues, including illegal takeover and underpayment, further taint the project. Lastly, the power plant opposes Bangladesh's 100% renewable energy target by 2050, outlined in the Mujib Climate Prosperity Plan (MCPP). UMPL initiated construction and landfill activities for a power plant without proper environmental clearance, catching villagers off guard. This led to sand accumulation on local agricultural lands, preventing farming since 2019. Livestock grazing land was taken, leaving cowsheds empty. The power plant's boundary wall also displaced villagers from the Meghna river, their former bathing and fishing spot (BWGED, 2022). According to the environmental conservation rule 2023 the project falls in the “Red” indicating it as a potential harmful project for the environment (MOEFCC 2023).


References

 
 
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