Foreign investment in the electricity sector of Bangladesh is going up remarkably every year compared to other countries in the world. In last one year, a total of $2.5 billion has been invested in the power sector to generate 2,000 MW power in private in sector.
It is also expected that another $15 billion investment will be made in the power sector by 2021, according to sources concerned. Power sector analysts said that investment-friendly environment has been created in the country due to prevailing political stability in the country in the last decade and the government is taking newer projects in the sector.
According to sources at Power Division, the total amount of investment in the electricity sector between the time period of 2009 and 2017 is $8.9 billion. Of this, $4.8 billion was invested in the public sector while it is $4.1 billion in the private sector.
Concerned officials said that the government is constantly working to make electricity available for the countrymen by 2021. Bangladesh will be able to achieve its target level of 39,000 MW power generations by 2030 if the current rate of foreign investment continues here.
“We are firmly committed to implementing our pledge to provide electricity to every household by 2021. And, we are on the right track,” said Prime minister’s Private Industry and Investment Adviser Salman F Rahman.
“Currently, about 90 per cent of the population has access to electricity. Every year, the electricity coverage is expanded to new areas,” he said.
Another $15 billion is projected to be invested in the sector by the time of 2019-2021. Most of the investment in this sector comes from China, Japan, India and Russia.
Meanwhile, the government has signed agreements with several countries, including Germany, Singapore, and Malaysia. It is expected that investment from those countries will come very soon. Moreover, several countries, including Saudi Arabia, Vietnam have expressed interest in investing in the promising sector, Power Division sources said.
“The role of foreign investment in energy sector is well known. Our local companies are collaborating with foreign ones. Also, as the prime minister said recently, we are also eyeing to import electricity from abroad, which would naturally involve the foreign investors,” Salman F Rahman said.
Recently, Reliance Power, India’s largest energy company, has agreed to build the largest gas-based power plant with the capacity of 718 MW at Meghnaghat in Narayanganj. A contract, in this regard, was signed at the Power Division building on September 1 of this year.
Meanwhile, a group of companies of United Arab Emirates led by Metito Utilities and JinkoPower has won a bid to build a 45-55 MW grid-tied PV array in Rangunia upazila of Chittagong district. On August 4, the companies submitted tenders to the Bangladesh Power Development Board expressing their interest to supply power at $0.0749/kWh, the lowest ever recorded in Bangladesh’s nascent solar industry.
Upon completion of the work, it will be able to generate 45 MW to 55 MW of electricity. Bangladesh will be able to buy solar power at an affordable price for twenty years.
The second lowest bidder — a consortium led by Joules Power, WAC Logistics and Jiangsu Zhongtian Technology — offered $0.0875/kWh, followed by $0.1013/kWh by a joint venture under Toma Construction and Kinus Co. Meanwhile, Scatec Solar offered $0.1060/kWh and Canadian Solar offered $0.1313/kWh.
In addition, AdaniWilmar Limited or AWL, a joint venture incorporated in 1999 between India’s Adani Group, will set up a power plant with a production capacity of 3,200 MW. Of the total,
1,600 MW power plants will be set
up in Bangladesh and the remaining 1,600 MW power plants will be constructed in India.
Despite the fact that the power plants will be set up in India, the electricity produced there will be provided only in Bangladesh. A total of $5 billion will be invested in India for the power plant construction and its transmission line.
Moreover, the company will also invest $3.2 billion in new projects. Under the new investment, a solar power plant with a production capacity of 500 MW will be set up. At the same time, LNG and LPG terminals will be built at Dhamra of Orissa Province in India. Gas will be piped directly from there to the national grid of Bangladesh.
Bangladesh-India Friendship Power Company (BIFPCL) will set up a project of $ 2 billion; of which $ 1.6 billion will be spent on the construction of contractor work. Exim Bank of India is lending the money to set up the power center.
Meanwhile, Bangladesh-China Power Company (Pvt.) Limited (BCPCL) and North West Power Generation Company Limited (NWPGCL) are jointly setting up a coal-based power plant with an estimated cost of $2 billion at Payra in Patuakhali. China’s Exim Bank and China Development Bank will lend about 80 per cent of the total cost to build the power plant and the remaining 20 per cent will be invested equally by the NWPGCL and BCPCL. In this connection, the loan agreement has already been signed and it is expected that the fund will be disbursed soon.
Bangladesh’s total installed renewable capacity reached roughly 601.88 MW by the middle of 2019, including 367.95 MW of solar PV, according to statistics from Bangladesh’s Sustainable and Renewable Energy Development Authority (SREDA).
“The power sector, like any other sector in a free market economy, is dictated by the rule of supply and demand. The demand for electricity in our country remains enormous. The electricity demand would be 34,000 MW by the year 2030. That is why the sector has become attractive to the foreign investors,” PM’s adviser said.
“As a country prone to possible adverse effects of climate change, protecting the environment is a priority for us. Moreover, environment-friendly electricity generation is what future demands. As such, the government currently offers incentives for those seeking to invest in solar power generation. The construction of multiple large-scale solar power plants is underway, with at least one being jointly financed by a foreign company,” he added.