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15 July 2024

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Summit, JERA sign memo on energy supply chain

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Published: 14:18, 27 April 2023   Update: 21:11, 27 April 2023
Summit, JERA sign memo on energy supply chain

Photo: Courtesy

Summit and JERA have signed a Memorandum of Understanding (MoU) valued at $2 billion to explore investment in the energy supply chain in Bangladesh.

The MoU was signed by Toshiro Kudama, CEO of JERA Asia, and Ayesha Aziz Khan, director of Summit Corporation and MD of Summit Power International in Tokyo on Thursday.

It was signed in the presence of Bangladesh Prime Minister Sheikh Hasina, according to a press release of the Summit Group.

Salman F Rahman, Private Industry and Investment adviser to the PM, AK Abdul Momen, minister for Foreign Affairs, Zunaid Ahmed Palak, junior minister of ICT Division, Prof Shibli Rubayat Ul Islam, chairman, BSEC and Lokman Hossain Miah, executive chairman of BIDA, senior Japanese officials including HE Iwama Kiminori, Japanese Ambassador to Bangladesh and Norihiko Ishiguro, chairman of JETRO and Muhammed Aziz Khan, founder chairman of Summit Group and Faisal Khan, additional managing director of Summit Corporation, among others were present of the deal signing ceremony.

The objective of the MoU is to collaborate in providing cost-effective and reliable long-term Liquefied Natural Gas (LNG) and other fuels supply in addition to developing both on-shore and off-shore regasification and storage infrastructure for Bangladesh.

Toshiro Kudama, CEO of JERA Asia said that the JERA is keen to assist Bangladesh's objective to secure a reliable energy supply and is pleased to be able to do that by building up the existing relationship with Summit.

The signing of the MoU is a significant first step towards achieving the objective, he said, adding that the JERA looks forward to further contributing to Bangladesh's reliable energy supply in collaboration with Summit.

Muhammed Aziz Khan, founder chairman of the Summit Group said a country's energy consumption has become the main index to its affluence and development.

Like the rest of the world, Bangladesh is also facing energy security concerns as a result of high-interest rates, supply-chain shock and market volatility, he said.

“At Summit, we are offering solutions through the development of much-needed LNG storage and supply infrastructure with our partner, JERA.”

As Bangladesh approaches the transition to a ‘developing country’ status in 2026, it faces global energy supply challenges. Summit and JERA’s collaboration offers Bangladesh an alternative affordable energy supply solution by bringing down the cost of importing essential fuels into Bangladesh.

It also dovetails with the International Monetary Fund’s (IMF) intent to reduce Bangladesh’s balance of payment pressure due to import-intensive climate investments as the recipient of the Resilience and Sustainability Facility (RSF).

Summit is the largest Independent Power Producer (IPP) in Bangladesh, reflecting 17 percent of the country's total private installed capacity and 7 percent of its total installed capacity.

Summit owns and operates a total of 18 power plants in operation or under development, and operates Bangladesh’s second Floating Storage and Regasification Unit (FSRU) and LNG import terminal with a daily regasification capacity of 500 million cubic feet. Summit accepted investment from JERA in 2019 and welcomed representatives to its Board.

Besides, JERA Asia Pte. Ltd. (JERA Asia) is a subsidiary of JERA Co., Inc. (JERA) which was created through the consolidation of the fuel and thermal power departments of the Tokyo Electric Power Company and the Chubu Electric Power Company.

Since agreeing to acquire 22 percent of Summit Power International's (“SPI”) outstanding shares in October 2019, JERA has been striving to enhance SPI's corporate value through the efficient construction and operation of power generation facilities as well as the decarbonisation-related opportunities.

In April 2022, JERA signed an MoU with SPI to collaborate on the development of a decarbonization roadmap for SPI.