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Asia Energy plans to go public for Phulbari coal, power projects
M Azizur Rahman

          The UK-based Asia Energy Corporation (Bangladesh) Pty Ltd plans to float primary shares worth a total of around US$ 10 million (Tk 700 million) for its Phulbari coalmine project and 500 mega-watt (MW) coal-fired power plant in Bangladesh stock market.
Sources said the company has already signed a Letter of Intent (LoI) with Equity Partners Limited, a joint venture merchant bank, to facilitate the launching of initial public offering (IPO) later this year.
The amount is, however a small portion of its planned $2.0 billion investment earmarked for its Phulbari coalmine project and 500 mega-watt (MW) coal-fired power plant close to the mine-site.
"We have planned to raise a part of our projected investments from Bangladesh's capital market considering its moderate base," a top official of the company told the FE Saturday.
He said that a major portion of the planned investment would be raised from foreign investors outside.
Shares of Asia Energy's parent company, Asia Energy PLC, are quoted on the London Stock Exchange's Alternative Investment Market (AIM).
Leading London-based advisors for Asia Energy are JP Morgan Cazenove and Barclays Capital.
Commenting on the IPO floatation plan in Bangladesh its Chief Executive Officer (CEO) Gary Lye said: "This decision is part of Asia Energy's commitment to giving investors in Bangladesh an opportunity to share in this major development project."
"It is also a measure of our long-term commitment to Bangladesh," he added.
"If a big company like Asia Energy floats share for development of a potential sector like coal-mining, it would obviously be good for the country's capital market to woo the investors," CEO of the Dhaka Stock Exchange (DSE) Salahuddin Ahmed Khan told the FE commenting on the issue.
Besides, it will add a new dimension to investment in the country's capital market, he added.
The Asia Energy already submitted its development plan to the government involving US$ 12 billion investment at Phulbari coalmine project over the next 30 years.
It has also submitted a US$ 476 million investment proposal to install a 500-mega watt (mw) coal-fired power plant alongside its planned Phulbari coalmine in Dinajpur.
Of the total $12 billion investment at Phulbari coalmine, $2.0 billion would be spent as capital costs and $ 10 billion as operating cost, Asia Energy's CEO in Bangladesh Gary Lye told the newsmen earlier.
The government would earn an estimated $7.0 billion as taxes, royalties, duties and rail and road charges from the Phulbari project.
Asia Energy has so far invested $18 million on feasibility study during the last one year to estimate the proven reserve of 572 million tonnes at Phulbari in the northwest region of the country.
The company will be able to produce coal amounting to 15 million tonnes a year of mostly export quality metallurgical and thermal coal for 30 plus years, at an average stripping ratio of 7.5 bcm per tonne, when it goes into full production from the year 2013.
Of the total production, 12 million tonnes of coal will be exported - 4.0 million tonnes to India by rail and 8.0 million tonnes by rail to Khulna-- and then by barge to a floating terminal of Akram point where it will be loaded onto the ocean-going vessels for export to the international market.
He said a total of 3.0 million tonnes of coal could be used locally.
The company has already attained environmental clearance for open pit mining at Phulbari. Bangladesh Department of Environment (DoE) approved the Environmental Impact Assessment for open pit mining on September 11 last.
For installing a 500 MW power plant the CEO of Asia Energy submitted the proposal simultaneously to the Board of Investment (BoI) and the Bangladesh Power Development Board (BPDB) to generate power from the plant by 2011.
This proposal for a 500 MW coal-fired power station aims to maximise the synergy of the Phulbari coal project with the rapidly growing energy needs of the country, company sources said.
Under the proposed power plant project, there would be provision for adding a second 500 MW power plant unit.
The plant will use pulverised technology to generate 3700 giga-watt per hour (GWh) burning 1.5 million tonnes of coal a year.
The coal to be used in the power plant is about one tenth of the 15 million tonnes of total annual output from the open pit mine of Asia Energy to be developed at Phulbari.
The power plant will be designed, constructed and operated according to international standards, utilising modern pollution prevention methods to meet both local and relevant international environmental emission limits, the company sources said.


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