$3b needed to implement power projects
July 5, 2009
Power Development Board (PDB) has assessed that around three billion US dollar is needed to implement the government’s robust plan to increase power production at a satisfactory level.
PDB, the state-run agency, in its proposal to the power division said the amount is needed to install four big coal-fired power plants, excluding other options, to install 21-35 power plants with a generation capacity of 25 to 100 megawatt (MW) based on furnace oil or diesel.
At the same time, PDB said the company needs another two to three billion dollar to add power to the national grid.
“We are going to present the proposal to the prime minister, who is also in charge of the power division. According to our assessment, we need another amount of $600 million to implement the small power plant projects,” Alamgir Kabir, acting chairman of PDB, told the news agency yesterday.
Under this plan, PDB has set to address the gap between the power generation and supply which now stands around 2,000 MW. It also plans to add 2,500 MW fresh generation.
The power division identified that it needs a huge fund to address three crucial things — (i) ensuring subsidy from the government to pay the bills of the IPPs (independent power producers) for purchasing power, (ii) ensuring budgetary allocation on regular basis for the payment for purchasing power from the rental power plants and (iii) mobilise $3 billion for setting up new power plants to address the nagging power crisis which was a major election pledge of the government.
To address the financial constraints in implementing the plans, Tawfiq-e-Elahi Chowdhury said the government is taking an initiative to raise funds for the power sector by issuing bonds and offloading shares of the state-owned power entities in the stock market.
He said the government is now planning to establish a financing company, adding: “We could raise money from public-private leasing agency and also from the stock market that could help us reduce the burden from budgetary allocations.”
“The state-owned energy companies, including Desco, PGCB, Meghna, Padma and Jamuna Oil, have already enlisted themselves in the capital market and we have a plan to issue bonds at home and abroad to raise more funds, “ he noted.
The PDB report said if it goes to install 500 MW rental power plants, it might need a subsidy of Tk 6,000 crore per year.
However, PDB is now paying Tk 1,000 crore as subsidy per year to purchase power from the rental power plants and Tk 500 crore subsidy per year to the IPPs.
Source: thedailystar.net
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