Committee working out modalities of creating power, energy fund
Wednesday, 2 December 2009
Sheikh Shahariar Zaman
The committee for formation of a power and energy development fund is working relentlessly to prepare a working paper on raising money from the capital market for this purpose.
The paper will be submitted to the government this month. The paper will focus on raising funds for financing generation of 7,000 MW electricity in the next five years, Ziaul Hasan Siddiqui, deputy governor of the central bank of Bangladesh and convener of the committee, told the FE.
"We've already held a couple of meetings and the paper will be finalised as soon as possible," he said.
After submission of the report, it will be scrutinised by the ministries of law and energy and then sent to the cabinet committee on economic affairs and the cabinet for necessary action.
"We are thinking of different modalities of raising the fund including channelising remittance into the capital market," he said, adding that floating of shares and bonds could be another option.
The government formed the 10-member committee on September 30 to raise the fund for the power sector.
President of Dhaka Stock Exchange Rakibur Rahman said many investors were willing to invest in power projects.
"The capital market can offer financing for a lot of power projects.
"We told the government to come up with projects and the market will provide the funding," Mr Rakib said.
The market has rebounded and the government should take the advantage of it, he mentioned.
"If the government cannot reap the benefit of the vibrant share market here, it would be very unfortunate," he said.
The Indian government has raised billions of dollars from their share market and spent the money for development of that country, he added.
"The state-owned companies including Sheraton and Sonargaon hotels and telecom companies should offload their shares immediately to enhance depth of the capital market," Mr Rakib said.
However, the committee will draw up a plan on how to raise the fund, which authority will take care of it and under which law it should operate.
Creation of the fund will reduce dependence on donors for funding as power projects in both public and private sectors will get loans from this fund.
It has been primarily estimated that the power sector would need 5 billion to 10 billion dollars to generate 7,000 MW power in next five years.
Bangladesh is facing an acute power shortage and the Awami League in its election pledge put much emphasis on mitigating the crisis.
The committee for formation of a power and energy development fund is working relentlessly to prepare a working paper on raising money from the capital market for this purpose.
The paper will be submitted to the government this month. The paper will focus on raising funds for financing generation of 7,000 MW electricity in the next five years, Ziaul Hasan Siddiqui, deputy governor of the central bank of Bangladesh and convener of the committee, told the FE.
"We've already held a couple of meetings and the paper will be finalised as soon as possible," he said.
After submission of the report, it will be scrutinised by the ministries of law and energy and then sent to the cabinet committee on economic affairs and the cabinet for necessary action.
"We are thinking of different modalities of raising the fund including channelising remittance into the capital market," he said, adding that floating of shares and bonds could be another option.
The government formed the 10-member committee on September 30 to raise the fund for the power sector.
President of Dhaka Stock Exchange Rakibur Rahman said many investors were willing to invest in power projects.
"The capital market can offer financing for a lot of power projects.
"We told the government to come up with projects and the market will provide the funding," Mr Rakib said.
The market has rebounded and the government should take the advantage of it, he mentioned.
"If the government cannot reap the benefit of the vibrant share market here, it would be very unfortunate," he said.
The Indian government has raised billions of dollars from their share market and spent the money for development of that country, he added.
"The state-owned companies including Sheraton and Sonargaon hotels and telecom companies should offload their shares immediately to enhance depth of the capital market," Mr Rakib said.
However, the committee will draw up a plan on how to raise the fund, which authority will take care of it and under which law it should operate.
Creation of the fund will reduce dependence on donors for funding as power projects in both public and private sectors will get loans from this fund.
It has been primarily estimated that the power sector would need 5 billion to 10 billion dollars to generate 7,000 MW power in next five years.
Bangladesh is facing an acute power shortage and the Awami League in its election pledge put much emphasis on mitigating the crisis.