A group of Japanese public and private lenders have agreed to lend nearly $645 million (Tk5,440 crore) to a power plant in Bangladesh that runs on liquefied natural gas (LNG).

The 718MW plant in Narayanganj is being built by Reliance Group in India and Jera, the largest power generation company in Japan.

The project is expected to begin commercial operations in 2022.

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

Nikkei Asian Review, a Japan-based media outlet, recently reported that other institutions, including Japanese megabanks such as Mizuho Bank, Sumitomo Mitsui Banking Corporation, and MUFG Bank, will also invest in the project.

Nippon Export and Investment Insurance, another Japanese government-run entity, will guarantee the private sector loan along with JERA’s stake in the power plant. This arrangement will cover losses in the event of conflict or nonpayment of power fees.

The Reliance Meghnaghat combined cycle power plant is being developed on the banks of the Meghna River in Meghnaghat, Narayanganj. As per the partnership agreement, Reliance owns 51 percent of shares while JERA will hold the remaining 49 percent.

The Bangladesh Power Development Board, the lone power buyer of the country, will purchase electricity from Reliance Power at a rate of Tk5.84 per unit.

On September 1 last year, Reliance also inked an agreement with Titas Gas Transmission and Distribution Company Limited (Titas Gas) to supply gas for electricity production.

Engineer Md Munirul Islam, deputy general manager (Sonargaon) of Titas Gas, told The Business Standard that they have a gas distribution line in Meghnaghat.

“However, the distribution company needs separate lines to supply gas there,” he said.