Power needs $35 b investment
Bangladesh’s power sector is one of the fastest growing in the South Asian region. The sector will play an important role in helping the country achieve its socio-economic goals
Special Correspondent: Investment in power and energy sector poses high potentiality in Bangladesh as the sector needs huge development for the graduation of mid-income status. Moreover, the demand of power and energy have increased almost 400 percent in a period of one decade but the electricity and gas supply have not increased against the demand.
The government has also not interest to invest in this sector rather the government aims to privatise power and energy sector, cutting subsidy. The sector is enjoying almost 45 percent subsidy from the government, which is one of the main cause of huge loan burden.
Significant skill upgrade and capacity building of the workforce is also key to sustain growth of the power sector in Bangladesh. This is in addition to new generating sources, a changing generation mix, increased operational efficiency, according to a new report of Power Division.
There is a need to develop a more efficient, transparent, deregulated and competitive power market for the supply of reliable and cheap power to citizens in Bangladesh. Bangladesh may also need to explore other sources of financing beyond the existing ones as it is envisaged that by 2041 the country would require investment of about $35 billion in the power sector, the source said.
Mamun Rashid, managing partner, PwC Bangladesh said: “Bangladesh’s power sector is one of the fastest growing in the South Asian region. The sector will play an important role in helping the country achieve its socio-economic goals. However there are constraints stemming from low energy access, rapid urbanisation, vulnerability to climate change and natural disasters and limited availability of land.”
Globally, power markets are undergoing a phase of disruptive transformation. The continuous interactions of various political, technological and economical forces are catalysing what could be the most dramatic change for the sector in the past century. This is the case with Bangladesh as well.
With the Government’s aggressive efforts, continuous support from the developing partners and effective implementation of policies, the country has shown remarkable progress in its journey so far. However, with these ever evolving trends, the industry further needs to adapt itself to accelerate the progress of the sector.
State Minister for Power, Energy and Mineral Resources, Nasrul Hamid said: The Government thinks that deregulation is the future. Private sector participation in transmission and distribution will bring investment and better service in this sector. However, providing reliable and affordable electricity to our citizens remains our main agenda, which is why we are treading carefully. But we want to start private sector partnership in transmission very soon as a test case.
Bangladesh’s installed capacity has increased remarkably in the past 10 years, from 4.5 gigawatt (GW) to 12.8 GW. According to the source, augmenting the existing electricity infrastructure of the country and an increased focus on the industrial sector could further help the country in the successful transformation of the sector.
Latif Khan, president, BIPPA and Vice Chairman of Summit Group said: There are certain issues concerning regulation, financing and technology prevalent in the private power generation sector today. Bangladesh’s power industry today needs to address these to attain our shared goal of implementing the Private Sector Power Generation Policy (PSPGP) and Power System Master Plan (2016).