Private energy cos seek exemption from some direct listing rules

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Kayes M Sohel
The country's private energy companies have sought exemption from some direct listing regulations to raise fund from the stock market for financing establishment of new power plants or expansion of the existing ones.
Under the Dhaka Stock Exchange (Direct Listing) Regulations, 2006, the company concerned should be in commercial operation for at least immediate past five years and should have made profit in three years out of the last consecutive five years with steady growth pattern.
"We are not in a position to meet above requirements as only recently most private entrepreneurs have started operation," said chairman of the Bangladesh Energy Companies Association (BECA) Moazzam Hossain, in a recent letter to the Securities and Exchange Commission (SEC).
The demand for relaxation of listing regulations has come from the power companies when the government in the budget has given priority to set up big power plants to generate 1500 mw under Public Private Partnership (PPP) projects next fiscal year to mitigate the nagging problem of power shortfall.
"As power projects are capital intensive and smooth power supply to the people is a challenge for the government, active participation of the private entrepreneurs is essential to materialise the government's vision-- electricity for all by 2020," said Hossain.
For the purpose of establishing new or expansion of existing power projects for meeting growing need for electricity, the SEC should consider our demand, BECA chief said.
When contacted, a high SEC official said, "The issue is under the lens of the commission."
Currently, 10 out of total 281 listed companies are energy firms. Of which, seven are state-owned.
According to the DSE data, energy companies accounted for 16.57 per cent of the total market capitalisation.
The government is currently working with an interim target of providing electricity to 60 per cent of the population by 2010.
Currently, electricity covers only 43 per cent of the total population of the country, and per capita electricity consumption is about 140 kilowatt hour (kwh), which is the lowest in the world, according to the BECA.
During a three-year road map starting from 2008, demand for power is expected to grow at the rate of 8-10 per cent annually.
The demand is expected to rise to about 6608 megawatt (MW) by 2010. For uninterrupted power supply, the generation capacity will be required to rise to at least 8000 MW, which will facilitate raising per capita consumption to 172 kwh and access to electricity to 60 per cent.
Thus, about 2800 MW of new generation capacity plants should be set up to ensure adequate supply of electricity, said BECA.