Indian-state-run Indian firm Bharat Heavy Electricals Ltd (BHEL) is on the cusp of agreeing a contract to build a $1.6bn coal-fired power plant in Khulna in southern Bangladesh.

According to Reuters the project represents an important victory for India who are trying to counter the growing influence of Chinese competition in the region.
India believes Bangladesh is a part of a “String of Pearls” China is building across the Indian Ocean that stretches from Gwadar port in Pakistan to Djibouti on the African coast where it is building a naval base.

China’s Harbin Electric International Company Ltd, which has power projects in Iran, Turkey and Indonesia among others, lost the bid on technical grounds, an unnamed Bangladesh official told the news agency.

The Indian government’s external lending arm, the Exim Bank, has backed up BHEL’s offer with nearly 70 percent funding of the project’s costs at a soft interest rate of around 1 percent above Libor, the leading global benchmark for pricing transactions, an Indian government official said.

The proposed power plant will have two units of 660 MW and will present a much-needed boost to a country where nearly two-fifths of the 160 million population do not have access to electricity, according to the World Bank.