TOKYO -- Jera, a joint fuel-procurement venture between Tokyo Electric Power and Chubu Electric Power, has agreed to buy 22% of Bangladeshi power company Summit Power International for 35 billion yen ($327.1 million), the company said on Monday.
Jera is Japan's biggest thermal power generator, but domestic power demand is declining as the population shrinks. The company plans to shore up its business by expanding into Bangladesh, where power demand is growing amid strong economic growth.
Summit Power -- a unit of the Summit Group -- operates gas and oil-fired power plants with a total capacity of about 1.83 million kilowatts, accounting for about 12% of the country's power-generating capacity. The unit is also building a new 590,000-kW power plant.
Jera will install management and employees at Summit Power to help build power plants and improve efficiencies.
The Japanese company has been expanding its business in Bangladesh since the start of the year in an effort to capture a larger share of the country's power market, which has reportedly grown about 10% on average between 2011 and 2018.
In September, Jera announced that it will become the first Japanese company to enter the power market in Bangladesh. It also plans to partner with India's Reliance Power to build a gas-fired plant near Dhaka.
Under a long-term purchase agreement with the Bangladesh Power Development Board, Jera will sell electricity for 22 years after its new operation starts.