Summit keen on more power, port projects

Muhammed Aziz Khan

SUMMIT Group eyes more power and port projects after the successful completion of most of its ventures in Bangladesh, the chairman of the company said.

The group has taken a $2-billion investment plan in order to set up a terminal for liquefied natural gas, two LNG-based power plants and ports, said Muhammed Aziz Khan.

“We have kept our promises by implementing all of our projects on time,” he said.

Summit Group is the largest private sector power producer in Bangladesh, generating over 1,500MW of electricity.

Recently, it completed the 115MW Barisal power plant and 55MW Narayanganj plant, while the 115MW plant in Gazipur and a floating liquefied natural gas terminal are under implementation.

The group has set up Summit Power International Pte Ltd in Singapore to get funds for investment in Bangladesh and plans to be listed on the city state's stockmarket next year.

Bangladesh's capital market is too small to cater to the capital-intensive energy and power projects, he said.

“Summit has committed to investing $2 billion by 2021,” said Khan.

As part of the investment plan, the group will have to invest $600 million as equity, as 30 percent of an investment project has to come in the form of equity.

Of the $600 million, about $200 million will come from Summit's own profits while the rest will be raised from local and international sources. The Singaporean office will primarily raise about $400 million.

Investors led by the International Finance Corporation have already invested $175 million into the company, Khan said.

The investment will enable Summit to execute the Summit LNG terminal project.

Summit Group is awaiting a final nod from the government to set up the floating LNG terminal on Moheshkhali Island in Cox's Bazar at a cost of $500 million to supply 500 million cubic feet of gas a day.

Summit LNG Terminal Company is expected to sign agreements today with Petrobangla and the energy and mineral resources division for terminal use and implementation in Dhaka.

The company has signed an agreement with an international provider of the floating storage and re-gasification unit (FSRU) on a hire-purchase basis.

For Bangladesh, this will be the second LNG terminal agreement. The project will be completed in 2018, Khan said. 

In July, state-run Petrobangla and Excelerate Energy signed the final deals to set up Bangladesh's first LNG terminal. Summit Group is taking assistance from US-based Excelerate Energy for the floating terminal project.

Excelerate Energy operates the largest fleet of FSRUs in the world. It provides LNG transportation, marketing and storage, and floating re-gasification services.

“So it is very natural that we talk to them,” Khan said.

Khan said geophysical, metocean, and geotechnical surveys need to be carried out for an FSRU project.

Summit's terminal will be located 4 kilometres away from the terminal of Excelerate. Due to its proximity, Summit will be using the study reports from the US company.

Khan hopes that once the LNG is made available, Summit would be allowed to set up two 600MW LNG-based power plants. “We also want to set up a few more 100MW power projects.”

The net worth of Summit as valued by KPMG is $1 billion. It has invested $2 billion in the energy sector alone.

In recent years, Summit has been able to attract investment from multinational lenders such as the International Finance Corporation, the Asian Development Bank as well as multinationals GE and Daelim of South Korea.

Summit's Singaporean company, in a joint venture with GE and Daelim, is bidding for a 330MW power plant project in Sri Lanka at $300 million with financing from international lenders.

Summit Alliance Port Ltd now has a dockyard in Chittagong, which facilitates exports and imports, and has opened a port in Narayanganj. It also has plans to expand its port infrastructure beyond the country.

“We have submitted bids to set up a port in Kolkata and Sri Lanka each in a joint venture with local companies in the host countries. The goal is to help Bangladeshi companies move cargo smoothly.”

Summit has also laid 35,000 km of optical fibre cables across the country, covering 64 districts and 80 percent of the upazila headquarters.

Khan said they are interested in foraying into the transmission and distribution of electricity in Bangladesh. “Transmission and distribution should be privatised.”

“We are blessed that we have received the opportunity to provide electricity to every home in Bangladesh. Hopefully, we will be able to provide internet connectivity to every home as well.”

Khan has called for reasonable taxation policies.

The difficulty in Bangladesh is the 37 percent corporate tax, 20 percent dividend tax and 30 percent personal income tax, he said.

“It is unreasonable to expect that people will invest their money, earn money and then pay about 70 percent in taxes.”

Khan demanded a level playing field for foreign and local investors. Exemptions granted to foreign investors provide them with discriminatory advantages, he added.

“The tax rate should be reasonable for everybody, from citizens of Bangladesh to foreign investors. Foreign investors should be welcomed into the country, so should my own brothers and sisters.”

“By having such high tax rates, the government forces people to maintain two-three books.”

Nowadays, Khan frequently visits Singapore and is in touch with investors in the country.

“I would like to feel that our office in Singapore is an extension of Bangladesh Investment Development Authority,” he said, laughingly.

“We portray how good Bangladesh is, how good Bangladeshi companies are and how good Bangladesh is as an investment destination. Investors should come and invest in the country.”

fazlur.rahman@thedailystar.net