Orion Group yesterday signed an agreement with the Power Development Board (PDB) to set up a coal-fired power plant in Munshiganj that will generate 635 megawatts of electricity.

Around $900 million or Tk 7,000 crore will be spent on the plant—Orion Power Unit-2 Dhaka Ltd—that will begin commercial production in the next 45 months, officials said.

Zahurul Haque, PDB secretary, and Salman Karim, managing director of Orion Group, signed the agreement for the implementation of the project and power purchase.

“We hope we can complete the project well ahead of the deadline and within the tenure of this government,” Obaidul Karim, chairman of Orion Group, said at the signing ceremony.

He said there is a common belief that coal-fired power plants are harmful to the environment.  “But there is no reason to be worried about the environmental hazards, as we will use state-of-the-art technology that will cause less pollution.”

Most of the developed countries get 50 percent to 70 percent of their electricity from coal-based power plants, he said. Without such plants, it would be difficult to achieve the target of producing 25,000MW of electricity by 2021, he said.

Orion Power will sell electricity to PDB and the Power Grid Company of Bangladesh at Tk 6.69 per kilowatt-hour.

However, given the falling trend in coal prices in the international market, the tariff may come down between Tk 5.86 and Tk 6 per unit.

Orion Power will require 3,800 tonnes to 5,700 tonnes of coal every day in the plant, which is a joint venture between Fujian Long Energy Company of China, Firstgen Energy of the UAE and Orion Power Meghnaghat of Bangladesh.

Poland generates 98 percent of its power from coal-based plants, while countries like China, Germany, Korea and India depend mostly on such plants for electricity, Power Secretary Monowar Islam said at the event. “We want at least half of our electricity from coal-fired plants.”

There is no alternative to sustainable power generation for industrialisation and economic development, he said.