ACWA Power has announced the signing of a Memorandum of Understanding with the Bangladesh Power Development Board (BPDB) for a LNG-based power plant and terminal in Bangladesh.

As part of the agreement, ACWA Power will develop a 3600 MW gas fired Independent Power Plant representing a total investment amount of approximately $2.5bn, that will help meet the country’s growing power demand.

The project will consist of the intended power plants, as well as a re-gasification terminal on-ground with an expected additional investment of approximately $500m.

The plant will potentially be located in Maheshkhali, however this will only be confirmed upon completion of the feasibility study.

The agreement, said to be one of the largest deals for Bangladesh’s power sector, was signed by BPDP chairman engineer Khaled Mahmood and ACWA Power chairman Mohammed Abunayyan.

The signing will also mark ACWA Power’s largest gas-to-power development and its initial foray into the Bangladesh power market. ACWA Power will also work with Saudi Aramco for the first time for such a project.

ACWA Power’s chief investment officer, Rajit Nanda stated: “Expanding our investment portfolio is a key focus for the company and we are delighted to be working with BPDB to participate in the burgeoning power generation sector here. With vast growth opportunities available, we are keen to extend our foothold in the region through our presence in Bangladesh. This is an exciting project for the company and we look forward to working with strategic partners such as Saudi Aramco to bring it to life and create value for the people and economy of Bangladesh.”

Bangladesh’s power sector is one of the fastest growing in South Asia, with a current installed capacity of around 24,000 MW electricity, a growth from 3,200 MW in 2009.