The planning commission (PC) has come under pressure from power divisions to approve the Rampal 1320-megawatt thermal power plant, close by the Sunderbans mangrove forest, despite the commission's refusal four months back.
Funding and ownership complexities were cited as immediate reasons for the PC's decision not to put its seal of endorsement on the giant power plant, undertaken by an Indian firm, officials said Friday in the wake of latest move.
The government officials close to the process said the power division recently in a meeting decided to send the Tk 145.84 billion (US$1.82 billion) development-project proposal (DPP) again to the planning commission to get approval.
In September 2014, the PC refused to proceed on project proposal for setting up the 1320-megawatt (MW) Maitree Super Thermal Power Plant due to its ownership and funding complexities.
According to PC officials, since the Rampal power plant will be installed by the Bangladesh-India Friendship Power Company (BIFPC) Private Limited under joint venture, and the funds will be mobilised by this entity, the PC could not approve and include it in the country's development plan.
A senior power-division official said an inter-ministerial meeting, chaired by State Minister for Power, Energy and Mineral Resources Nasrul Hamid, in the last week of December had decided to send the DPP again to the PC for getting it through the Executive Committee of the National Economic Council (ECNEC).
He said since it is a fast-track project of the Bangladesh government, the power division is trying to get approval from the PC as soon as possible.
The official argued as the Rampal 1320MW plant would be set up by a newly formed India-Bangladesh joint-venture private limited company, as per the government rules and regulations the PC cannot consider the project for approval. "The Bangladesh government does not have the full equity in the company. So, the PC cannot consider the project as a public-financed one," he told the FE, requesting anonymity.
The National Thermal Power Corporation (NTPC) of India and the Bangladesh Power Development Board (BPDB) formed the joint-venture company--BIFPC -- in January 2012 to install the coal-fired 2X660MW plant.
According to the preliminary DPP, the BIFPC would borrow 70 percent of the total Tk 145.84-billion cost of the project from the Export Credit Agency (ECA).
Out of the remaining 30 percent cost, the state-owned BPDB will provide 15 percent funds as its equity while the Indian company will provide the rest 15 percent as its own equity.
A BPDB official said they would provide credits equivalent to 15 percent equity for the Bangladesh side.
"How the BPDB can provide funds to a JV private limited company? Besides, when the BPDB on behalf of the company will go for borrowing ECA loans, it will require sovereign guarantee from the finance ministry. But the finance ministry cannot provide guarantee to a private limited company," said another power division official.
When asked, a senior PC official said they could not proceed without a clear document of ownership and confirmed funding arrangements by the implementing agency.
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