Power sector needs $10.8b to implement master plan

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M Azizur Rahman
The country will require investments worth over US$ 10.8 billion to increase total electricity production capacity to 22,370 megawatts (MW) as envisaged in a master plan prepared for the power sector.
"The Power Division is now devising means to attract capital from both external and domestic sources for investment in the next two decades," a senior official of the division told the FE.
Currently the country's total electricity production capacity is around 5,200 MW but the actual production ranges between 3,400 MW and 3,800 MW.
Sources said ensuring reasonable and affordable price for electricity by pursuing least cost options, making the power sector financially viable and having a mix of concessional capital and foreign direct investment (FDI) are among the reforms the power division is undergoing with to entice power sector investments, he said.
Three separate road shows - one at home and one each in Dubai and Singapore - were organised recently to lure investments for a 450 MW independent power plant (IPP) under the division's plan.
Financial restructuring and recovery plan, introduction cost reflective tariff for financial viability of the utilities, development of demand side management and introduction multi-buyer mode in the country's power sector are also planned to attract investment.
A total of 12 power plants each having the generation capacity of 700 MW and 13 plants having the generation capacities of 450 MW each are among the planned big plants for installation by 2025 next.
Encouraged by the power sector reforms a number of multilateral donor agencies have come forward for funding in the country's electricity generation projects.
The donors, including the World Bank (WB), the Asian Development Bank (ADB), the Japan Bank for International Cooperation (JBIC), the Canadian Export Development Centre (EDC) and the Islamic Development Bank (IDB), are keen to provide funds for electricity generation.
A number of international consultancy firms have recently been appointed by the power division to prepare tender documents and a project guideline under the conditions set by the donor agents for investments.
"The donors now want transparency in tender procedures before awarding the project work to avoid delay in issuing work order," a Power Cell official said.
The power division is also drafting a comprehensive plan to boost electricity generation utilising all possible avenues to meet the mounting electricity demands.
Installing new coal-fired power plants, importing electricity from power-rich neighbouring countries and setting up nuclear power plant are among the planned avenues the division is now considering for implementation.
Exchanging electricity with the bordering countries during off-peak and peak hours and establishing joint venture power plant projects with them are also in the division's planned strategy.
The potentials of renewable energy such as solar power, wind power and power generation from solid wastes would also be explored to enhance electricity generation for future needs.