Energy crisis can be mitigated within three years: WB
Saturday, 20 March 2010
FE Report
Bangladesh can potentially overcome its nagging energy shortage within the next three years through institutional capacity building and strong commitment from the government, a senior World Bank official said Thursday.
Identifying the mitigation of power crisis as one of the highest priorities for Bangladesh in the years ahead, the WB official also stressed regional cooperation and long-term financing in the energy sector for an increased power supply within the country.
"Bangladesh is currently facing dual challenges of bringing electricity in its off-grid areas while assuring uninterrupted supply for its urban populace", World Bank Country Director Ellen Goldstein told the reporters.
"However, much of the current deficiency in power supply can be overcome within three or four years if the government can show some strong commitment in mitigating the situation", she said, "which would require some tough decision making from the highest level of the government in terms of making choices to find out the best solutions."
The WB country director's view came while visiting a number of World Bank-funded power plants and solar power projects in the district of Tangail where long-term financing from the global lender has resulted in a number of successful ventures in the power sector.
The World Bank country director assured of continued assistance from the global financier in the coming years for the country's small-scale power sector projects through its Investment Promotion and Financing Facility (IPFF) project.
"In less than three years of operation, this IPFF project of World Bank has delivered seven fully operational power plants while adding 178 megawatts (mw) of electricity to the national grid," she said, adding, "we will be scaling up this support by an additional US$ 257 million (25.70 crore) financing for this project."
"At the same time, highest priority will be given to accelerating growth through investments in infrastructure, particularly power and energy", she said, adding "we are already providing financing for advisory support for the government to tender out more private IPPs."
Underlining the need for reforms for strengthening the country's institutional capacities, the WB official also stressed bringing more efficiency and transparency within the government and private sector agencies.
"Institutional capacity building will also be important for overcoming the prevailing energy crisis", she said, "as assuring transparency while increasing efficiency within various relevant organisations would be vital to assuring greater power generation capacity."
The newly appointed WB chief was also supportive of greater cooperation at the regional level on energy related issues while she also stressed the need for long-term financing for private ventures in the power sector.
"A number of countries within the region including Nepal and Bhutan have immense potential for the large scale production of hydro-electricity", she said, "so importing hydro-electricity from those states can be an affordable and cost effective option in the near future."
Drawing instances of successful private entrepreneurship in power sector through long-term financing, the World Bank official drew the example of Doreen Power plant in Tangail, which, with a capacity of 22 mw, has started its operation in November 2009.
The Tk 1.15 billion project, which has been partly financed by World Bank IPFF project and National Credit and Commerce Bank Limited (NCCBL), originally went to operation two months ahead of its stipulated time.
IPFF project is helping the local financial institutions to offer long-term financing to infrastructure projects, the WB official said, due to the local financiers' unwillingness to invest in long-term power schemes.
At the same time, WB is also supporting the $ 321 million Rural Electrification and Renewable Energy Development (RERED) project, which, according to statistics, has connected 0.60 million rural homes to the national electricity grids and provided 0.32 million remote households with Solar Home Systems (SHS).
An effective method for bringing electricity to the off-grid rural areas, SHS has also been proved to be costly for the lower income group of people who cannot afford its initial down payment as well as long-term service charges.
"Solar Home System has a tremendous scope for replicating in the hard-to-reach areas including coastal regions", the WB chief said, adding, "manufacturing the SHS equipment locally could however bring down the high procurement cost which could also bring it within the reach of the lower income group."
Bangladesh can potentially overcome its nagging energy shortage within the next three years through institutional capacity building and strong commitment from the government, a senior World Bank official said Thursday.
Identifying the mitigation of power crisis as one of the highest priorities for Bangladesh in the years ahead, the WB official also stressed regional cooperation and long-term financing in the energy sector for an increased power supply within the country.
"Bangladesh is currently facing dual challenges of bringing electricity in its off-grid areas while assuring uninterrupted supply for its urban populace", World Bank Country Director Ellen Goldstein told the reporters.
"However, much of the current deficiency in power supply can be overcome within three or four years if the government can show some strong commitment in mitigating the situation", she said, "which would require some tough decision making from the highest level of the government in terms of making choices to find out the best solutions."
The WB country director's view came while visiting a number of World Bank-funded power plants and solar power projects in the district of Tangail where long-term financing from the global lender has resulted in a number of successful ventures in the power sector.
The World Bank country director assured of continued assistance from the global financier in the coming years for the country's small-scale power sector projects through its Investment Promotion and Financing Facility (IPFF) project.
"In less than three years of operation, this IPFF project of World Bank has delivered seven fully operational power plants while adding 178 megawatts (mw) of electricity to the national grid," she said, adding, "we will be scaling up this support by an additional US$ 257 million (25.70 crore) financing for this project."
"At the same time, highest priority will be given to accelerating growth through investments in infrastructure, particularly power and energy", she said, adding "we are already providing financing for advisory support for the government to tender out more private IPPs."
Underlining the need for reforms for strengthening the country's institutional capacities, the WB official also stressed bringing more efficiency and transparency within the government and private sector agencies.
"Institutional capacity building will also be important for overcoming the prevailing energy crisis", she said, "as assuring transparency while increasing efficiency within various relevant organisations would be vital to assuring greater power generation capacity."
The newly appointed WB chief was also supportive of greater cooperation at the regional level on energy related issues while she also stressed the need for long-term financing for private ventures in the power sector.
"A number of countries within the region including Nepal and Bhutan have immense potential for the large scale production of hydro-electricity", she said, "so importing hydro-electricity from those states can be an affordable and cost effective option in the near future."
Drawing instances of successful private entrepreneurship in power sector through long-term financing, the World Bank official drew the example of Doreen Power plant in Tangail, which, with a capacity of 22 mw, has started its operation in November 2009.
The Tk 1.15 billion project, which has been partly financed by World Bank IPFF project and National Credit and Commerce Bank Limited (NCCBL), originally went to operation two months ahead of its stipulated time.
IPFF project is helping the local financial institutions to offer long-term financing to infrastructure projects, the WB official said, due to the local financiers' unwillingness to invest in long-term power schemes.
At the same time, WB is also supporting the $ 321 million Rural Electrification and Renewable Energy Development (RERED) project, which, according to statistics, has connected 0.60 million rural homes to the national electricity grids and provided 0.32 million remote households with Solar Home Systems (SHS).
An effective method for bringing electricity to the off-grid rural areas, SHS has also been proved to be costly for the lower income group of people who cannot afford its initial down payment as well as long-term service charges.
"Solar Home System has a tremendous scope for replicating in the hard-to-reach areas including coastal regions", the WB chief said, adding, "manufacturing the SHS equipment locally could however bring down the high procurement cost which could also bring it within the reach of the lower income group."