Japan’s JERA buys stake in power unit of Bangladesh’s Summit Group for $330m

Photo: Reuters

Japan’s JERA Co has acquired a 22% stake in Summit Power International for $330 million, the companies said on Monday, to enable the establishment of major energy infrastructure projects in Bangladesh.

Singapore-based Summit Power International is the holding company for all power assets of Bangladesh’s Summit Group, while JERA is a joint venture between Tokyo Electric Power and Chubu Electric Power Co.

The announcement comes four months after a memorandum of understanding was signed between the companies in Tokyo.

International Finance Corp (IFC), IFC Emerging Asia Fund, and United Arab Emirates-based EMA Power Investment, which were shareholders of Summit since 2016, will exit through this transaction, according to the statement. However, IFC will continue to be a large lender to Summit, it added.

The partnership will support Summit Group’s investment plan of $3 billion by 2022 in Bangladesh, Muhammed Aziz Khan, Summit Group’s chairman said in the statement.

Bangladesh currently has a capacity to produce 18,000 megawatts of electricity per day, said Nasrul Hamid, the country’s junior minister of power, energy and mineral resources said, adding that it aims to increase it to 24,000 megawatts per day by 2021.

“Foreign investment is required to achieve this goal.”

JERA said in a separate statement that it has positioned Bangladesh as a priority country for investment due to an expected rapid rise in electricity demand along with steady economic growth in the South Asian country.

“By capitalizing on the strong business foundation established through JERA’s investment in Summit Power … JERA will strive to explore business opportunities in the country and further expand its earnings base,” the company added.

The company last month had agreed to buy 49% stake in a new 750 megawatt (MW) gas-fired power station project in Bangladesh, which is under development by India’s Reliance Power.

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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