Japan’s JERA acquires 22pc of Summit Power

FT ONLINE

In a move to establish major energy infrastructure, including power generation projects in Bangladesh, Japan’s largest energy company JERA Co., Inc. (“JERA”), has acquired a 22% stake in Summit Power International Limited ("Summit") for USD 330 million.

After the deal, the total equity value of Summit Power International 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.

As a shareholder of Summit, JERA will strive to increase the corporate value of Summit through the efficient construction and operation of its power generation facilities and contribute to the sustainable economic growth of Bangladesh.

“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.

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 percent 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.

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 India’s Reliance Power, it will acquire 49 percent of the project with a 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.