Reliance’s power plant gets Tk205cr tax waiver

Indian conglomerate Reliance Group has received a Tk205-crore tax waiver from Bangladesh for its 718MW natural gas-fired combined cycle power plant project underway on the outskirts of Dhaka.

The Internal Resources Division of the finance ministry issued a statutory regulatory order (SRO) on 24 November, confirming the waiver.

The tax benefit has been given to the neighbouring country's company based on a contract with the Bangladesh government and the recommendation from the Power Division, said officials at National Board of Revenue.

Under the order, Reliance has received the exemption from Tk205.27 crore of financing documents and land lease agreement under the stamp duty which include ICD forward lease agreement, security assignment, deed of mortgage of a leasehold interest, share pledge agreement and land lease agreement.

In September 2019, Reliance signed agreements with the Bangladesh government to set up the power plant at Meghnaghat in Narayanganj. The plant is expected to come into operation in August 2022 as per the deadline.

In last one year, however, the project has seen only 9% progress.

Under the agreements, the government will purchase electricity from the project for a 22-year period at a rate of Tk5.85 each unit.

Reliance Power will build the plant in partnership with Japanese Jera where it will have 51% of shares while the latter will hold the remaining 49%.

A group of the Japanese public and private lenders have agreed to lend nearly $645 million – equivalent to Tk5,440 crore – to the power plant.

Of the total loan, 41% will be covered by the state-owned Japan Bank for International Cooperation. The Asian Development Bank will participate in the joint credit as well.

On 1 September last year, Reliance also inked an agreement with Titas Gas Transmission and Distribution Company – widely known as Titas Gas – to supply gas for electricity production.