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Bangladesh announces power sector deregulation
Bangladesh has announced a sweeping deregulation scheme for its power sector in a bid to ease the country's crippling electricity shortages, a senior government official said.
Foreign investors will now be allowed to set up power plants without winning a government contract and to sell on the national grid, Toufique-e-Elahi Chowdhury, energy advisor to Bangladesh's prime minister, said late Wednesday.
"We hope billions of dollars will now be invested by local and foreign entrepreneurs. This will boost electricity supply and foster industrialisation. It will also help us trim power shortages to zero by 2013," he told AFP.
The government will buy 30 percent of the power produced by private companies and allow them to use the national grid to sell the rest of their electricity directly to consumers, at government-determined rates, he said.
Analysts welcomed the move, saying the current bidding process takes months, is often tainted with graft and favours incompetent firms with ties to the government.
The deregulation follows growing demand from the business community, particularly in the garment sector, to fix the country's power crisis.
Bangladesh's exports have been growing at a record 35 percent a month in the first five months of the fiscal year, which starts in July, driven by garment exports.
Garment industry bodies say the country's factories are flooded with orders they cannot accept due to productivity limits imposed by constant power cuts.
Bangladesh has long suffered severe power outages because of demands from its fast-growing economy. The power shortfall is especially acute in the hot summer months from April to October.
Years of under-investment mean Bangladesh's power plants generate around 4,000 megawatts of electricity a day, while demand totals 6,000 megawatts -- a figure growing by 500 megawatts a year due to rapid industrialisation.
Bangladesh announces power sector deregulation - LANKA BUSINESS ONLINE
Bangladesh has announced a sweeping deregulation scheme for its power sector in a bid to ease the country's crippling electricity shortages, a senior government official said.
Foreign investors will now be allowed to set up power plants without winning a government contract and to sell on the national grid, Toufique-e-Elahi Chowdhury, energy advisor to Bangladesh's prime minister, said late Wednesday.
"We hope billions of dollars will now be invested by local and foreign entrepreneurs. This will boost electricity supply and foster industrialisation. It will also help us trim power shortages to zero by 2013," he told AFP.
The government will buy 30 percent of the power produced by private companies and allow them to use the national grid to sell the rest of their electricity directly to consumers, at government-determined rates, he said.
Analysts welcomed the move, saying the current bidding process takes months, is often tainted with graft and favours incompetent firms with ties to the government.
The deregulation follows growing demand from the business community, particularly in the garment sector, to fix the country's power crisis.
Bangladesh's exports have been growing at a record 35 percent a month in the first five months of the fiscal year, which starts in July, driven by garment exports.
Garment industry bodies say the country's factories are flooded with orders they cannot accept due to productivity limits imposed by constant power cuts.
Bangladesh has long suffered severe power outages because of demands from its fast-growing economy. The power shortfall is especially acute in the hot summer months from April to October.
Years of under-investment mean Bangladesh's power plants generate around 4,000 megawatts of electricity a day, while demand totals 6,000 megawatts -- a figure growing by 500 megawatts a year due to rapid industrialisation.
Bangladesh announces power sector deregulation - LANKA BUSINESS ONLINE
