General Electric has snapped up two major deals in Bangladesh—one with Summit Corporation and the other with the Power Development Board—bringing some good news to the troubled American industrial giant.
BPDB has signed a deal with GE to build a 3,600MW LNG-based power plant on the southeastern island of Moheshkhali in Cox’s Bazar.
The Switzerland unit of GE will own 30 percent of a joint venture for the power project, while BPDB will hold 51 percent with the remaining 19 percent left for a future strategic investor.
The development of 5,600-acre land for the project is estimated to cost $1.6 billion and the power plant will cost $2.8 billion, according to details of the memorandum of understanding signed in Dhaka on Wednesday.
Earlier in the day, GE signed a separate memorandum of understanding with Summit, the largest private power producer in Bangladesh, to join a joint venture already planned by Summit and Japan’s Mitsubishi Corporation for a $3 billion power project.
In a statement on Wednesday, Summit billed the joint investment as the largest FDI attracted by any Bangladeshi private company.
Summit, Mitsubishi and GE will build a 2,400-megawatt power plant. Summit will hold 55 percent equity while Mitsubishi will take 25 percent and GE 20 percent.
Summit announced the power sector investment as part of a MoU signed with Mitsubishi on Mar 13 in Singapore in the presence of Prime Minister Sheikh Hasina.
The project is expected to be completed by 2023, with work beginning next year.
GE will be investing in equity and technology in the four combined cycle power plants with a total capacity of 2,400MW. Mitsubishi will be the partner for the complete integrated project, according to the statement.
Scope of this project also includes two units of onshore LNG terminal with a total of 380,000m³ capacity, oil terminals with 100,000MT capacity and another 300MW HFO-based power plant.
“In support of the government’s Vision 2021 and 2030, Summit is partnering with GE and Mitsubishi to bring in the largest private FDI to Bangladesh, best technology at the world’s lowest tariff to meet increasing demand of people and businesses for energy and power,” said Muhammed Aziz Khan, chairman of Summit.
“GE Power is navigating customers through an energy transformation with a complete portfolio of fuel choices and innovative technology,” said GE Power President and CEO Russell Stokes.
BELEAGUERED AMERICAN GIANT
The two deals appear to bring some good news to GE, now a beleaguered company that was kicked out of the Dow Jones Industrial Average in June. The company had inhabited the stock gauge for more than a century.
Once the world’s most valuable company, GE is the worst performer in the Dow in 2018, as it was last year.
GE that embodies American industry and managerial know-how lost almost $140 billion of market value in the last year, spurring a plan to shed $20 billion of assets in a bid to realign businesses and cut costs as the company grapples with debt challenges and flagging demand.