Dhaka to seek $10b from Beijing
power sector development
Shahed Siddique
Bangladesh is likely to seek USD 10 billion for the development of its power sector from China during Chinese president Xi Jinpings visit to Dhaka, scheduled for October 14 and 15. According to the governments plan, it will submit a list of seven to eight projects, which are mostly related to generation and distribution, to be financed.
State minister for power and energy Nasrul Hamid recently said, We will request China to invest USD 10 billion in our power sector as we see that country as one of the biggest investors in our development sector. Mahbubur Rahman, additional secretary of the Power Division, told The Independent: We will definitely submit a list of projects that need investment. But the list is yet to be finalised.
Power ministry officials said they would meet foreign ministry officials this week to finalise the projects that could be submitted to the Chinese delegation during Xis visit.
The officials said Bangladeshs installed power generation capacity is around 14,000 MW. But the sector was facing difficulties as it did not have enough safe distribution lines, mostly in the capital. This is why the government was planning to have some underground sub-stations and 33KV distribution lines, which are capital-intensive.
The Dhaka Power Distribution Company (DPDC) and Dhaka Electricity Distribution Company (DESCO) have prepared some projects in this regard, which require investments of more than USD 2 billion. Bangladesh will ask China to invest in those projects.
Bangladesh-China Power Company Ltd (BCPCL), a 50-50 partnership between North-West Power Generation Company of Bangladesh and China National Machinery Import and Export Corporation, will set up a 1,320 MW coal-fired power plant at Payra, Patuakhali, requiring an investment of USD 2 billion.
To set up the plant, BCPCL had signed a USD 1.56 billion contract with a Chinese consortium for engineering, procurement and construction works a few months ago.
The Power Division also wants to have Chinese investment in this project.
BCPCL is expecting to sell each unit of electricity from the plant at Tk. 6.65 to state-run Bangladesh Power Development Board (BPDB).
As per the governments plans for the power sector, there will be a coal-based 1,320-MW power plant at Asuganj that needs an investment of USD 2 billion. This project could be included in the governments wish list to China, sources said.
Bangladesh is also planning to set up a power generation hub at Matarbari in Moheskhali, Coxs Bazar. By 2024, there will be generation of 10,000 MW of power from this location. Though Japan is giving support in terms of money and consultancy, but Bangladesh needs more funds to develop the location for the power hub. Moreover, the government needs USD 3 to 4 billion to fill some coastal areas to set up power stations there.
Power Division officials said a Chinese company will set up a 1,320-MW coal-based plant at Matarbari, but Bangladesh would seek more investments for the location from the Chinese government. The state-owned Bangladesh Petroleum
Corporation (BPC) initiated the SPM project for handling crude oil from Kutubdia Island to Patenga in Chittagong in a bid to tackle oil pilferage and reduce time in supplies of fuel oil across the country. The BPC has already received an unsolicited technical offer from a Chinese firm named China Petroleum Pipeline Bureau (CPPB) and an MoU was signed for building the SPM, which needs an investment of more than USD 500 million, on September 29, 2014.
The Energy Division is trying to include the project in the investment list to be submitted to China.
