$7b S Korean investment proposal hangs in balance

FE Team | Published: August 23, 2007 00:00:00 | Updated: February 01, 2018 00:00:00

FHM Humayan Kabir
A US$7.0 billion investment proposal of a Korean consortium placed to the government for approval in 2005 is still awaiting response from relevant authorities.
Under the investment proposal, the consortium, comprising two public and two private sector enterprises of Korea, will initially invest $2.0 billion to explore coal and generate power from it in Bangladesh and later the remaining $5.0 billion will be invested in hydrocarbon exploration in the Bay and infrastructure development, the sources said.
A source in the Energy Ministry said the Korean government recently has formally requested its Bangladeshi counterpart to consider their investment proposals and give the approval as soon as possible.
"The government should take a decision shortly on the investment proposal as such huge investment in Bangladesh's energy and power sector is imperative at this moment to augment the power generation as well as hydrocarbon reserves," he said adding, the proven reserve of natural gas in the country would be exhausted within 2012.
The sources in the Energy Ministry informed this correspondent that two state-owned enterprises --Korea Resources Corporation (KORES), a mineral exploration body, and the Korean Electric Power Corporation (KEPCO), an electricity generation company, and two private sector enterprises -- Luxon Group and POSCO -- jointly placed their package investment proposal to the Energy Ministry in October 2005.
According to the sources, the South Korean government and the Luxon Group had requested Bangladesh government repeatedly to consider their proposals quickly.
The sources further said that along with business delegation, the Vice Minister of the Industries, Commerce and Energy Ministry of Korea, Won Gul Lee, visited Bangladesh last October when the Korean side requested the Bangladesh counterpart to consider their proposal.
Earlier, the Korean private company Luxon Group signed a memorandum of understanding (MoU) with the Board of Investment (BoI) in Bangladesh for investing in the country's energy sector.
The Luxon Group was also allowed by BoI to set up a liaison office in Bangladesh, sources said.
A competent source of the BoI said that they were awaiting instructions from the line ministries in order to proceed ahead with the Korean investment proposal.
The Korean company has also applied for coal exploration licence from the Bureau of Mineral Resources Development (BMD). However, the BMD informed Luxon Group that awarding of licence to explore coal would be considered only after finalising the national coal policy, which is now being prepared by the government.
Sources in the energy ministry further said that following the repeated requests of the Korean government, the Bangladeshi Ambassador in Korea sent letters on several occasions to the Energy Ministry in Dhaka through diplomatic channel for considering the Korean package investment proposal.
Meanwhile, Energy Secretary AMM Nasiruddin told the FE Tuesday that they would consider the proposals in line with the national coal policy and third round bidding for hydrocarbon exploration, which are now awaiting for finalisation by the government.