The German engineering giant Siemens will invest more than USD 7 billion to generate 8,000 MW power in Bangladesh. This is the biggest ever unsolicited proposal from any European company, and internationally.

Out of 8000 MW, the government-run North-West Power Generation Co. Ltd, Bangladesh (NWPGCLB) and Siemens AG will set up a 3,600MW liquefied natural gas (LNG) plant at a cost of USD 2.8 billion in Payra, next to the 1,320MW coal-based power plant being set up by China.

If the deal is done with Siemens, the German company will become the largest single foreign power-generation company in the country.

NWPGCLB managing director AM Khurshedul Alam and Siemens South Asia CEO Sunil Mathur signed the memorandum of understanding.

“Germany is our well-wisher, and it is good for the Sheikh Hasina government that all the biggest energy and power generation companies are interested (in Bangladesh) at this moment. The biggest example is that the EU company Siemens has come with a bid proposal,” state minister for power and energy, Nasrul Hamid, said at a programme in Dhaka yesterday.

“We are signing a deal for 3,600 MW with NWPGCLB, and another bid deal will be signed with the Bangladesh Power Development Board (BPDB) this month,” the state minister added.

For this 3,600-MW plant, a joint-venture company will be established with 80 per cent share of Siemens and 20 per cent of NWPGCLB. The first unit of 1,200 MW will be generated in June 2020. The other two units (1,200 MW each) will be set up by 2021.

Dr Thomas Prinz, the German ambassador in Dhaka, said: “We've a keen interest in developing the power sector in the country.”

“We offer the latest technology, not the cheapest technology,” he added.

During his speech, the ambassador brought up the Rohingya issue. “Not for political reasons, but out of principle, we stand by Bangladesh and that is why we have donated 50 per cent of the commitment for the Rohingyas in Brussels,” he said.

Dr Tawfiq-e-Elahi Chowdhury, the energy adviser to the Prime Minister, told the audience, “Once a blacklisted company, Siemens has come up with a huge investment.”

“I will request Germany to train our people and help our young generation, which will bring good prospects for the country. Not only that, I think Siemens can use Bangladesh as a strategic place for energy trade as the Seven Sisters (seven north-eastern states) of India and Myanmar have a huge demand for power,” the adviser added.

The New York Times had reported on December 15, 2008: “…Siemens, beginning in the mid-1990s, used bribes and kickbacks to foreign officials to secure government contracts for projects like a national identity card project in Argentina, mass transit work in Venezuela, a nationwide cellphone network in Bangladesh and a United Nations oil-for-food program in Iraq under Saddam Hussein.”

After these charges surfaced, the German company was blacklisted in many counties.

After yesterday’s programme, BPDB chairman Khaled Mahmud told The Independent that Siemens was removed from the black list a few years ago and is eligible to submit a tender for the Electricity Generation Company, Bangladesh, a government-owned firm.

“We will finalise the details of a 4400-MW power plant very soon. All the power will be generated with LNG,” he added.

To a query from the media, Mahmud replied: “We are working on the issue of setting up the LNG terminal and deciding who will import the LNG. Nothing has been finalised yet.”

Sources said that in the second week of August, the German giant proposed an 8000-MW LNG-based power plant to be set up in Bangladesh at a cost of USD 7 billion. “The government has decided to go ahead with the proposal within a short time, which is very unusual,” pointed out a Power Division official.

However, power secretary Dr Ahmad Kaikaus said: “The demand for power is increasing very fast. We thought the growth of power would be 7–8 per cent, but it turned out to be 14 per cent. That’s why we revised the power plant master system.”

The country’s capacity to generate electricity now stands at 15,821 MW. The government has targeted to raise it to 24,000 MW by 2021 and 40,000 MW by 2030.

Siemens South Asia CEO Sunil Mathur and Siemens Bangladesh CEO Prabal Bose were also present at the programme.