Bangladesh Power Development Board will use Tk 763 crore from its own resources to increase the capacity of a power plant in Sylhet after the Islamic Development Bank withdrew its financial support for the project.

The proposal to upgrade the 150-megawatt power plant to 250MW with own financing was approved yesterday by the cabinet committee on purchase.

The Executive Committee of the National Economic Council first approved the project in 2013 for implementation with the IDB financing at a cost of Tk 707 crore.

In 2014, the government and the IDB signed a lease financing agreement of $85 million (about Tk 680 crore), but the development bank in November 2016 pulled out from the project due to complexities in appointing a contractor.

The power division last year had sent the details of its nominated contractor, who was the lowest bidder, to the IDB for consent. But the Jeddah-based multilateral lender instead suggested awarding the work to the second lowest bidder, a Sri Lankan consortium.

The BPDB and the IDB exchanged views several times over the matter, after which the development lender withdrew from the project. However, the IDB said the funds can be used for any other project of the energy sector.  Subsequently, the BPDB turned its attention to implementing the project on its own. Chinese firm Shanghai Electric Group, the lowest bidder, will implement the project.