CDC Globeleq completes acquisition of Bangladesh power plants
11 December 2003
CDC Globeleq, the emerging markets power company, completed on December 10 the acquisition of 810 megawatts (MW) of newly-constructed gas-fired generation in Bangladesh from The AES Corporation. This acquisition, valued at US$448 million, marks another important step in CDC Globeleq’s strategy to become the leading emerging markets power company.
Commenting on the transaction, Bob Hart, CEO of CDC Globeleq, said, “This transaction is a defining moment for the growth of our business in Asia. We are grateful to the Government of Bangladesh for its support and commitment.”
The acquisition includes two power plants, Haripur and Meghnaghat. Haripur, a 360-megawatt combined cycle gas turbine (CCGT) plant, started generating power in 2001. Meghnaghat, a 450-megawatt CCGT plant, became operational in November 2002. The two plants account for 25% of Bangladesh’s generating capacity and produce some of the most efficient and economic power in the world. The goal of these two projects is to provide clean, affordable and reliable power.
The World Bank, Asian Development Bank and the Government of Bangladesh back these projects. Sale proceeds are approximately US$144 million in cash plus assumption of US$304 million of project company debt. The two plants, both located near Dhaka, have improved the reliability of power supply for the entire population, who previously suffered severe and frequent power shortages.
According to the Bangladesh Ministry of Power, Energy and Mineral Resources, the country will need to double its electric generation capacity in the next seven years to meet rising demand. The limited role assumed by traditional power companies in emerging markets means that CDC Globeleq’s investments are increasingly important to meet the needs of Bangladesh’s economy and society.
Mr. Syed Abdul Mayeed, chairman of the Bangladesh Power Development Board (BPDB), which is the sole customer for the power generated by both plants, said, “We are very pleased to work with CDC Globeleq in our efforts to meet the power needs of our country. CDC Globeleq’s financial strength and wealth of experience in operating power generation assets make them ideally suited as a partner in developing our national power infrastructure. We look forward to working with them.”
Dale Sinkler, CEO of the Haripur and Meghnaghat plants, said, “We are very proud of the performance of the plants, which are truly world class and are run by a highly professional group. The teams at the plants are excited by the opportunity to work with CDC Globeleq”.
This acquisition follows CDC Globeleq’s purchase of Kelvin (a 600-megawatt coal-fired power station serving the city of Johannesburg) and Songas (a 110-megawatt gas to electricity project in Tanzania, which is still under construction) earlier this year. This is in line with CDC Globeleq’s international strategy of acquiring existing power generation assets in Africa, Latin America and Asia. Four CDC Globeleq power investments in Asia, including India and Sri Lanka, will offer the potential for regional synergies with Haripur and Meghnaghat.
CDC Globeleq, the emerging markets power company of CDC Group plc, provides power to people and industry in emerging markets. It creates value for its shareholder and co-investors by helping to relieve a critical constraint to economic and social development.
CDC Globeleq has a portfolio of generation and distribution assets with a net capacity of 2,540 megawatts in Latin America, Africa and Asia, and is actively engaged in acquiring additional assets. The company’s management team, led by CEO Robert Hart, has a wealth of experience in developing and operating power assets in emerging markets. More information about CDC Globeleq is available at www.cdcglobeleq.com.
