Country set to get Japan fund for power project

---

S M Jahangir
Bangladesh is set to receive a fund amounting to 41.2 billion yen from the Japan Bank for International Cooperation (JBIC) for the country's power projects that include setting up of a 360 megawatt (MW) power plant at Haripur.
Installation of two electricity sub-stations - one by the Power Generation Company of Bangladesh and another by the Rural Electrification Board (REB) -- will also come under the proposed credit package, official sources said.
The government of Japan has already pledged the enhanced volume of soft credit worth about Tk 24.82 billion for financing the proposed power projects, they said.
Of the total volume, the JBIC will initially provide 17.76 billion yen worth of credit as per its earlier commitment while the rest of the amount will be made available in phases.
"An agreement on the 17.76 billion yen credit is expected to be signed between the Economic Relations Division (ERD) of the government of Bangladesh and the JBIC by the end of this month or early next month," a senior Power Division official said.
Terming the proposed credit as one of the cheapest ODA (overseas development agency) loans for Bangladesh, official sources said it is expected to be available at less than 1.0 per cent rate of interest.
Besides, the proposed ODA loan will also be repayable in 40 years with a 10-year grace period, they said.
Under the credit arrangement, a process is on to appoint a foreign consultant for preparation of bidding documents for the proposed projects, said an official.
Some consultancy firms have already been short-listed, they said, adding that one of them will be appointed soon after the signing of the credit deal.
"Hopefully, a consultancy firm will take over the responsibility of preparing the bid documents by September next," said the official.
International tenders will also be invited for the three power projects immediately after the completion of bid document in February, 2008, he noted.
Since Japan is a member of the Organisation for Economic Cooperation and Development (OECD), an international organisation helping governments tackle the economic, social and governance challenges of a globalised economy, it requires to follow the best practices with regard to credit support, he mentioned.
The government has taken up the 360MW Haripur combined cycle power plant with a view to helping ease the country's chronic electricity supply shortfall, officials said.
Besides, the installation of the two proposed power sub-stations will also help improve the country's overall electricity distribution and transmission systems, they said.
Meanwhile, the JBIC, one of the major development partners of Bangladesh, has been supporting the country's development activities, especially in areas of rural infrastructure, transportation, telecommunications, power, water supply, education and flood protection.