Japan’s JERA acquires 22pc of Summit Power for $330mn

Japan’s JERA has agreed to acquire a 22 per cent stake in Summit Power International, a Singapore-based unit of Bangladesh’s Summit Group, for $330 million.

That means Summit Power International’s total equity value is $1.5 billion.

The new investment was made in accordance with the memorandum of understanding on the development of energy infrastructure projects in Bangladesh that was concluded between JERA and Summit Power in May, JERA said in a statement on Monday.

Summit Power, the largest independent power producer in the country, owns and operates power generation facilities that produce approximately 1.8 gigawatt, representing about 12 per cent of the country's capacity.

The company is currently constructing power generation facilities with a capacity of approximately 590 megawatts and, with several new projects also being planned, significant growth is expected in the future, bdnews24.com reports.

“Because the demand for electricity in Bangladesh is expected to grow rapidly with steady economic growth, JERA has positioned it as a priority country for investment, participating in a power generation project in Bangladesh for the first time in September of this year,” JERA said.

JERA plans to send executives and employees to Summit Power. As a Summit Power shareholder, JERA will strive to increase the company’s corporate value through the efficient construction and operation of its power generation facilities, thereby contributing to Bangladesh’s sustainable economic growth.

In September, JERA agreed to acquire stakes in a gas-based combined cycle power project in Bangladesh now under development by Reliance Power.

Under the agreement, signed with the India’s Reliance Power, it will acquire 49 per cent of the project with combined capacity of 750MW. The project will be set up in Narayanganj’s Meghnaghat, 40km southeast of Dhaka. The project will be set up within 36 months of signing the agreements.