The government has planned to utilise external and internal sources in a bid to finance new electricity generation and distribution projects, officials said.
As part of its plan for future power projects, the government wants to generate a substantial amount of electricity within next ten to fifteen years.
According to the plan, US$ 16.84 billion will be raised from offshore markets by issuing bonds and Tk 353 billion from domestic sources in phases.
The target of generating and distributing electricity will be achieved through implementation of new projects under 11 companies.
As part of the government's preparation, the Dhaka Stock Exchange (DSE) has submitted a proposal to issue bonds in offshore markets within five to ten years.
"The government's aim is to ensure electricity for all. Now we are trying to make the companies equipped so that the bonds can be issued at higher rates, avoiding risk factors," said Ahmad Kaikaus, additional secretary of Power Division.
The government also wants to keep alternative channels ready for raising funds for power generation, he added.
"Foreign investors look at the history of issuing bonds. We have to minimise risk factors to make the bonds lucrative to foreign investors as we have not issued such kind of bonds earlier," Mr Kaikaus said.
According to the Power Division data, the government needs US$ 16.84 billion and Tk 353 billion to generate more than 6,250 megawatt (MW) electricity.
Under the Ashuganj Power Station Company Ltd, the government needs US$ 1.6 billion for 1,320MW coal-fired project in Patuakhali.
Under the Electricity Generation Company of Bangladesh, the government wants to generate 100MW through wind-based project in Feni, 400MW through coal-based project in Munshiganj, 1200MW through coal-based project in Cox's Bazar and 100MW through solar-based project in Feni. These four projects require above US$ 8.0 billion.
The government's plan for electricity generation also includes 100MW wind-based project at Kalapara, 1320MW imported coal-based project at Payra and 1000MW domestic coal-based project at Dighalpara under West Zone Power Distribution Company. To run these projects, the government will need US$ 3.87 billion.
Under the Rural Power Company, the government wants to run 350MW coal-based project at Gazaria and 360MW fossil fuel-based project in Mymensingh. These two projects require US$ 885 million.
Besides, five projects are at feasibility and conceptual stages to assess the cost of generating and distributing electricity. The projects are: 1320MW coal-based project and 200MW solar-based project at Ashuganj Power Station, 200MW and 1320MW coal-based project at Rural Power Company, 150MW dual fuel-based project in Kushtia and Bhola.
The costs of running these projects are yet to be assessed.
According to the DSE proposal, the government can raise funds by issuing equity and bonds through a special purpose company. The bonds can be listed with Singapore Stock Exchange and equity with local stock exchanges.
"We have proposed launching the government's projects by issuing the bonds worth US$ 2.0 billion. The government's target will be fulfilled after seven to eight years if the bonds worth US$ 2.0 billion are issued after every two years," said a DSE official. "The coupon rates of our bonds will be less than the rates offered by Sri Lanka as Bangladesh's sovereign rating is better than Sri Lanka," he added.
According to the DSE proposal, the government should issue bonds targeting Singapore Stock Exchange initially.
The DSE official said if the government wants to raise funds from European countries, they will have to follow the compliance directives of the European Union.
Before submitting a report on bond issue, a delegation from DSE visited Singapore to get idea about the preparation of issuing bonds in offshore markets. "The government will have to appoint foreign issue managers and legal experts to issue bonds in offshore markets," the official said.
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