Foreign companies have raced to invest in the country’s power sector as the government aims to generate 60,000MW of electricity by 2041.
Companies from Russia, Britain, Germany, Japan, China, India and the United States have already joined the race by signing investment deals with Bangladeshi authorities to set up mega power plants here.
The country would require investment worth US$40 billion to increase electricity generation to 60,000MW by 2041, officials said.
Russian state-owned firm Rosatam Atomic Energy Corporation is already investing US$12.65 billion in the country’s lone nuclear power plant (2,400MW) at Rooppur. India, China and Japan are also investing in power plants in the country. These four countries are now installing the several largest power plants in the country.
Besides, many foreign companies are knocking at the doors of the Ministry of Power, Energy and Mineral Resources regularly considering boundless opportunities for investment in local power sector, officials said.
“The power generation capacity of the country has reached over 16,000MW and the government is working relentlessly to raise the capacity to 24,000MW by 2021,” State Minister for Power, Energy and Mineral Resources Nasrul Hamid Bipu told
The New Nation on Friday. He said the government also targets to achieve affordable electricity for all by 2021. By 2030, the country’s power generation capacity will reach 40,000MW and by 2041 it will go up further to 60,000MW.
“We will require huge investment in power sector to achieve the goal,” said Nasrul Hamid Bipu, adding, “The government is looking for both foreign and private investment for the country’s power sector development.” He cited that the government has already brought a number of reform measures for attracting investment of foreign companies in power sector.
“Bangladesh has become an ideal place for foreign investment. The investment-situation here is now far better than any time in the history. So, various countries are now showing their interest to invest in the country’s power sector,” said the State Minister.
In July 2017, the Coal Power Generation Company Bangladesh Limited (CPGCBL) signed a contract for construction of 1,200MW Matarbari coal-fired power project at US$4.5 billion project with Sumitomo-led Japanese consortium.
The Matarbari Coal-fired Power Project is the country’s second largest investment project, next to Rooppur Nuclear Power Project, funded by JICA. The first unit of the 1,200MW power plant with 600MW capacity would be commissioned by December 2022 and the other by June 2023. In May last year, Bangladesh Power Development Board (BPDB) signed a joint venture agreement with China Huadian Hong Kong Company Ltd (CHDHK) to construct a 1,320-megawatt (MW) coal-fired power plant at Maheshkhali in Cox’s Bazar at a cost of U$2.0 billion.
Earlier in November 2017, the cabinet approved a joint venture agreement between Bangladesh’s state-owned Rural Power Company Ltd and Norinco International China to build two power plants to produce 1320 mw electricity.
The plants will be constructed at Paira in Patuakhali.
Besides, China’s energy giant PowerChina in January this year signed an agreement and a contract with GCM Resources, a leading British resource exploration company, for development of a coal-fired power plant in Bangladesh’s northern district Dinajpur.
The proposed project is part of a broader strategy by GCM to generate 6,000 MW of low cost electricity for the Bangladesh market utilizing domestic coal, according to media report.
American company GE also singed a deal with BPDB last year to build a 3600MW power plant LNG-based power plant on Moheshkhali Island in Cox’s Bazar.
The plant will cost US$ 2.8 billion, according to details of the memorandum of understanding signed between the GE and BPDB. Neighbouring India also joined the race to construct 1320 MW Rampal Power Project. Indian state-owned firm National Thermal Power Company (NTPC) formed a joint venture with Bangladesh Power Development Board to implement the project by 2019 at an estimated cost of US$ 1.6 billion.
In February this year, Bangladesh’s North-West Power Generation Company signed a deal with Siemens AG of Germany to build an LNG-based power plant in Patuakhali’s Payra.
The estimated cost of the 3,600 megawatt plant is $2.8 billion and 80 per cent of the cost is expected to come from loans and rest will remain as equity. In July last year, Bangladesh Power Development Board (BPDB) inked a memorandum of understanding of worth US$4.4 billion to build 3,600MW power plant.
Although many global players are in the scene, China appears to be winning the competition as Bangladesh’s largest partner in power sector development after signing of major deals with Bangladesh government. Bangladesh received a record $3.61 billion last year as foreign direct investment (FDI), a rise by 68 per cent from 2017. Of the amount, power sector alone attracted investments worth $1.01 billion, where China’s contribution was $834 million, according to an official figure.
“The government is now focusing on implementing mega power plants for raising the electricity production by 24,000MW by 2021 when the country will be celebrating the golden Jubilee of its Independence,” said Nasrul Hamid Bipu adding that ten of such power plants are now under implementation.”
When asked, he said that implementation of power projects faced delays due to technical and financial problems.
“We have resource constraint. So, we are encouraging foreign investment to implement base load power plants in the country,” he said.
Officials said that the government is expecting about US$15 billion investment in its power sector in the next five years. The investment will be used to build power projects and power sub-stations and set up transmission and distribution network across the country.
