The government has initiated a fresh move to mobilise fund from the capital market through offloading shares of the state-run power entities to finance power sector development projects, officials said.
Under the move, a high-powered committee, comprising of representatives from relevant ministries, including the Ministry of Finance and the Power Division (PD), has been formed to identify scope and method in June. PD issued a circular in this regard on July 16, they added.
PD additional secretary Dr Ahmad Kaikaus has been made convener of the committee with additional secretary of Finance Division A R M Nazmus Sakib, managing director of ICB, representatives of BSEC and DSE, and managing directors of Power Grid Company of Bangladesh Ltd (PGCB), Dhaka Power Distribution Company Ltd (DPDC) and Electricity Generation Company of Bangladesh (EGCB) Ltd as members. A joint secretary of PD was made member secretary of the committee.
The government sat with the state-run power companies in May to discuss about the issue.
The committee will sit today (Wednesday) to devise ways to mobilise required fund. It will also fix a method to bring the companies to the capital market, including identifying necessary instruments and possible entities to offload shares, according to an official.
The committee will submit recommendations to mobilise fund for implementing the development projects under PD. Besides, it will suggest ways to improve overall capital situation of power sector, he added.
"We are doing feasibility study to identify tools that can be used to collect fund from the capital market," PD additional secretary Dr. Ahmad Kaikaus told the FE.
"Besides, we are working on the issue of utilizing the fund that will be collected from the capital market. We are yet to fix how much fund will be collected and how many entities will offload shares."
Power sector is one of the major sectors of the government. If the power sector entities go public, it will be a significant financial inclusion, he added.
However, experts and sector insiders expressed doubt on successful implementation of the government's new move.
They said the previous move to offload shares of more state-owned enterprises (SoEs) has long been hanging in balance due to procedural complexities and dillydallying of the authorities concerned despite repeated reminders.
Professor Mahmood Osman Imam of Department of Finance, University of Dhaka told the FE that now the country's capital market is experiencing a bearish trend.
So, the government should take measures first to make the market vibrant before taking more public sector entities to it. Otherwise, the investors will not feel encouraged to invest in the companies.
The Dhaka Electric Supply Company (DESCO) has already offloaded 25 per cent share and PGCB over 23 per cent share in the stock market.
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