Agreement on WB power sector loan likely in May next

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FE Report
The World Bank (WB) has resumed talks with the government after a long break, aiming to provide $275 million loan to an integrated energy and power sector development project in Bangladesh.
The global lender suspended its pre-negotiation process in June this year. The current talks began early this month.
However, sources in the Power Division said, a WB mission visited Dhaka November 3-9 and discussed with concerned government ministries and agencies the relevant issues.
According to previous schedule of the Washington-based donor, negotiations for the loan were to be completed by the month of October last and the loan agreement signed in November-December period this year, official sources said.
But the Bank, the sources said, delayed the process for unknown reason and missed the schedules.
The WB now wants to complete the negotiations in February-March period next year. The loan agreement is expected to be signed in May, 2008, sources in the WB local office said.
Seeing the worsening power supply situation in the country and shortage of government funds to set up new power plants, the WB along with some other big donors has come forward to financing power projects in early 2006 after a lapse of more than a decade.
The large donors, including WB, Asian Development Bank (ADB) and Japan government, pledged to provide funds in power generation sector early last year to boost power supply.
The country is currently facing over 1000MW power shortfall against the total demand for more than 4200MW in peak-hour.
The Manila-based ADB has already confirmed credit worth $465 million in June last for setting up two power plants with a 150-megawatt (MW) capacity each and some electricity transmission and distribution lines.
Under the proposed $275 million loan of the WB, a 300MW capacity peaking power station at Siddhirganj will be installed.
Besides, a 60-km long and 30-inch diameter gas transmission line from Bakhrabad to Siddhirganj to supply gas to the proposed power station and 11-km long 230kv power transmission line from Siddhirganj to Maniknagar for supplying power to the Dhaka city from the power station will be set up.