Bank of America wants to provide $ 50b to support BD's renewable energy sec

[Anubis]

I raised the question considering the time range...still it's unbelievable to me. $50 b investement in 17 years to a poor third world nation simply raises eye brow. Let's wait...with time it'd be clear to us.

They will give it to us over 17 years.But I am sure that we will have to repay it gradually not in one year.So by then we will be strong enough to repay it.But God knows how high the interest rate will be and how much we will have to pay back!

By the way everyone the acronym is not BOA it is BofA.

 

[my2cents]

Why is it that you think a $50 billion power sector invstment in Bangladessh will tremble the shareholders? BD is a lucrative market for electricity, not necessarily that all the energy sources shall be renewable. Do not you see a co-relationship between the digging of the BoB by the US companies and the US interest to invest in the electricity sector? So, it is very simple. US is certain that oil/gas is available in the Bay, and BD also needs to increase its power output.

US is aware that BD has a high electricity demand, but lacks fund to build power plants. So, it is a good business proposition for the USA to invest money in the most profitable sector in BD that has a very bright future, indeed! I think, your millions in the Bank of America will bring high dividends for you if invested in Bagladesh.

So, better wait for a few months and buy more BoA shares once you hear the finalization of investment. One point to note, US will certainly not loan out the money to a mismanaged BD. It will ask big companes like GE and Simons to take the lead, and the BoA will lend money to these companies.

By the way, you owe me a 2% commission on your investment capital in the BoA..

good comeback @eastwatch. It is premature to come to any conclusion based on one meeting. You have valid reasons to invest in BD power sector. Deficit power is the bane of our south Asia. I hope you guys will allow american power companies to make some profit for their investment. If I recollect even TATA wanted to invest in your power sector but was rejected. There are couple of Indian power projects (1300 MW Bagerhat's Rampal coal plant in BD and JV to build Tipaimukh dam for hydro power) that are work in progress which will hopefully cement trust between India and BD.

 

[longyi]

Why is it that you think a $50 billion power sector invstment in Bangladessh will tremble the shareholders? BD is a lucrative market for electricity, not necessarily that all the energy sources shall be renewable. Do not you see a co-relationship between the digging of the BoB by the US companies and the US interest to invest in the electricity sector? So, it is very simple. US is certain that oil/gas is available in the Bay, and BD also needs to increase its power output.

US is aware that BD has a high electricity demand, but lacks fund to build power plants. So, it is a good business proposition for the USA to invest money in the most profitable sector in BD that has a very bright future, indeed! I think, your millions in the Bank of America will bring high dividends for you if invested in Bagladesh.

So, better wait for a few months and buy more BoA shares once you hear the finalization of investment. One point to note, US will certainly not loan out the money to a mismanaged BD. It will ask big companes like GE and Simons to take the lead, and the BoA will lend money to these companies.

By the way, you owe me a 2% commission on your investment capital in the BoA..

First let me just say Bangladeshi are hard working people and they are very serious to position their country on the right path for economic growth and I respect them for that.

My position is BOA is a bank not an investment company and as a bank it should stick to what it does the best, that is taking good care of depositors' money and shareholders' interest. BOA, like many banks across US and the globe, is still smarting from a decade of greed (mortgage lending) and mismanagement. Just like other banks it's in a process of shredding non core interests. In another word it's returning to its roots: taking in deposits, service and lending.

The bulk of its income, of course, is from lending- cautious lending. The best way to achieve cautious lending is to diversify its lending portfolio and not put all the eggs in one basket. Lending $50 billion to one client, again let me stress I'm by no mean demeaning Bangladesh, even though that client is a sovereign state is not a good practice of cautious lending. One thing to note here is BOA has the least exposure on EU sovereign debts among major US banks. Another thing is corporates America, because the structure of the stock market, only see the future in terms of months not 10 years down the line.

My take on the OP's article is, if it's true, BOA will be the lead banker of a consortium of banks that are investing in Bangladesh with the US government as some sort of guarantor. One thing baffles me is why the giant oil and gas companies in the US are not involved since they are the ones with ample cash and technical expertize.

BTW thanks for the tip but I'll tell you one thing though: if BOA lends the $50 billion alone you'll see its share price plummets 20-30% on its first trading day.

 

[fallstuff]

I just cant fathom the thought that a commercial bank like Bank of America will venture into this kind of adventure in Bangladesh.

This is more riskier than 2008 mortgage backed asset meltdown.

What is the source of this info?

It just does not make ny sense.

 

[kalu_miah]

I just cant of fathom the fact that a commercial bank like Bank of America will venture into this kind of adventure in Bangladesh.

This is more riskier than 2008 mortgage backed asset meltdown.

What is the source of this info?

It just does not make ny sense.

Like you I smell something fishy in this report. Sometimes this kind of photo-op is created for political purposes. Instead of FEB, which is a known biased news outlet, we need a more credible source.

 

[Moander]

I just cant fathom the thought that a commercial bank like Bank of America will venture into this kind of adventure in Bangladesh.

This is more riskier than 2008 mortgage backed asset meltdown.

What is the source of this info?

It just does not make ny sense.

You are forgetting that Bangladesh is one of the country which wasn't effected by global financial crisis. I think despite of political instability, Bank of America choose Bangladesh because of its potential. May be they think political instability is better than financial meltdown.

 

[eastwatch]

You are forgetting that Bangladesh is one of the country which wasn't effected by global financial crisis. I think despite of political instability, Bank of America choose Bangladesh because of its potential. May be they think political instability is better than financial meltdown.

Yes, it is a good news, and I think, BoA will not invest directly as has been pointed out clearly by @longyi, because it is a Bank and is not an investment company. So, the course of action this Bank can take is it will lend money to its giant international power companies, who will seek local partners and will invest in the energy sector. I think, our local newspapermen, with lack of knowledge, always simplify critical points and vice versa. So, the reporting dd not reflect the reality.

Anyway, I expect this investment to be materialized because US oil companies will shortly start delivering oil or gas from the bottom of BoB.

 

[Moander]

Yes, it is a good news, and I think, BoA will not invest directly as has been pointed out clearly by @longyi, because it is a Bank and is not an investment company. So, the course of action this Bank can take is it will lend money to its giant international power companies, who will seek local partners and will invest in the energy sector. I think, our local newspapermen, with lack of knowledge, always simplify critical points and vice versa. So, the reporting dd not reflect the reality.

Anyway, I expect this investment to be materialized because US oil companies will shortly start delivering oil or gas from the bottom of BoB.

If USA starts to consider Bangladesh as a desirable investment destination, then we will soon see others international firms to come to Bangladesh as well.

 

[eastwatch]

good comeback @eastwatch. It is premature to come to any conclusion based on one meeting. You have valid reasons to invest in BD power sector. Deficit power is the bane of our south Asia. I hope you guys will allow american power companies to make some profit for their investment. If I recollect even TATA wanted to invest in your power sector but was rejected. There are couple of Indian power projects (1300 MW Bagerhat's Rampal coal plant in BD and JV to build Tipaimukh dam for hydro power) that are work in progress which will hopefully cement trust between India and BD.

1) When TATA wanted to invest it was thought that BD is floating on gas, which is not true. BD has a shortage of supply, but, we expect US oil companies will shortly discover large fields in the BoB. Another point is TATA wanted to use most of its power to the steel smelting shops to be built in BD. BD people did not want its gas to be burned to heat TATA furnaces and the steel ingots then go to India. It would have caused hollowing out of our gas without getting ourselves any real benefits.

2) Coal-based power plant in Bagerhat may not be feasible because it will cause destruction of mangroves in the Sunderbans due to emission of pollution. I believe, the project will be scraped finally. By the way, can you tell me the source of coal in India and its contents of ash and sulpher.

3) BD has helped India to transit heavy equipments to Tapiala plant in Tripura through its land, sea and river. India promised to give us 100MW of power. But, when Tripura wants it to be delivered, Delhi does not give its nod to it, this is what Manik Sarker, the CM of Tripura, was lamenting. He is from east Bengal.

4) Tipaimukh is a no-go power plant. BD has not yet agreed to even its construction. It will cause the destruction of typical Haor life in Sylhet. It will be an ecological disaster for both Meghalaya and Sylhet.

 

[my2cents]

1) When TATA wanted to invest it was thought that BD is floating on gas, which is not true. BD has a shortage of supply, but, we expect US oil companies will shortly discover large fields in the BoB. Another point is TATA wanted to use most of its power to the steel smelting shops to be built in BD. BD people did not want its gas to be burned to heat TATA furnaces and the steel ingots then go to India. It would have caused hollowing out of our gas without getting ourselves any real benefits.

2) Coal-based power plant in Bagerhat may not be feasible because it will cause destruction of mangroves in the Sunderbans due to emission of pollution. I believe, the project will be scraped finally. By the way, can you tell me the source of coal in India and its contents of ash and sulpher.

3) BD has helped India to transit heavy equipments to Tapiala plant in Tripura through its land, sea and river. India promised to give us 100MW of power. But, when Tripura wants it to be delivered, Delhi does not give its nod to it, this is what Manik Sarker, the CM of Tripura, was lamenting. He is from east Bengal.

4) Tipaimukh is a no-go power plant. BD has not yet agreed to even its construction. It will cause the destruction of typical Haor life in Sylhet. It will be an ecological disaster for both Meghalaya and Sylhet.

1. I remember the deal with TATA did not go through because of bureaucratic delays and no guarantees on uninterrupted supply of gas for its steel projects. But BD itself is reeling with power deficits. First it needs to tackle the power and gas shortages.

One more thing you are overlooking is the export potential and the ancillary units that will sprout up.

2. My understanding is that the environmental studies have been conducted on the adverse impact of coal plants on mangroves.I am not very well informed about Bagerhat coal plant other than it was proposed using Australian coal because of its low sulfur content and less impact on the mangroves. I don't think the coal from Assam state will be suitable because of its high ash and sulfur content. Australian coal is an exception in the world for its low sulfur content.

3. Our central govt. is playing hard ball but will relent in due time. Our bureaucracy is the slowest in the world. Also the transmission lines have to be set up which will take up some time.

4. First the proposal to build the dam was for flood control, but later hydro power was added when BD showed interest. This proposal for 50:50 JV to build Tipaimukh dam for hydro power will benefit both our countries. The ecological disaster can be mitigated by making it a run of the river project. But I know I am talking to deaf ears because our govt. is in aggressive move to expand and make this a multipurpose dam with or without BD consent.

 

[fallstuff]

You are forgetting that Bangladesh is one of the country which wasn't effected by global financial crisis. I think despite of political instability, Bank of America choose Bangladesh because of its potential. May be they think political instability is better than financial meltdown.

To me its a matter of common sense, not AL Vs BNP.

Development loan interest rates are typically under 1%. We all made a big deal out of the Indian loan where rate was 1.5%. BofA can earn more money by buying treasury bills or other bonds which are risk free return. They are a commercial bank, I doubt that development loans are part of their port folio.

 

[eastwatch]

First the proposal to build the dam was for flood control, but later hydro power was added when BD showed interest. This proposal for 50:50 JV to build Tipaimukh dam for hydro power will benefit both our countries. The ecological disaster can be mitigated by making it a RUN OF THE RIVER project. But I know I am talking to deaf ears because our govt. is in aggressive move to expand and make this a multipurpose dam with or without BD consent.

But, even a real time run of the river project may not be feasible for the Sylhet Haors. What is so special about these Haors? The low-lying Haors are not suitable for paddy/agriculture cultivation during the summer because it is fed with a continuous flow of Surma water. So, since time immemorial the farmers here cultivate fish in the summers. They cultivte the land for crop in winter when there is no or little water, and the land is not wet.

A hydro-electric plant is supposed to produce almost the same amount of electricity throughout the entire year, and this is not possible without regulating the water. So, in Tipaimukh, the summer water will have to be stocked in the upstream to be released in winter. So, it means the Haors will get less water in summer. As a consequence, there will be no more a fish cultivation there. This will destroy the livelihood of our people there. On the other hand, the winters will receive much more water than now. This will cause the destruction of crop agriculture, because the Haors will be submerged with water. So, we get hurt both in summer and in winter.

Please read the points minutely and try to comprehend them. You will see that because of a very special geographical construction of Sylhet Haors the Tipai dam will cause Bangladesh a great harm. I am not creating a hype, but I am stating the probable destruction of a vast region's ecology as well as the loss of livelihood for many millions of people living there.

I hope, the politicians and bureaucrats of BD and India will understand the negative impact the Tipai will cause to Sylhet.

 

[CaPtAiN_pLaNeT]

Yes, it is a good news, and I think, BoA will not invest directly as has been pointed out clearly by @longyi, because it is a Bank and is not an investment company. So, the course of action this Bank can take is it will lend money to its giant international power companies, who will seek local partners and will invest in the energy sector. I think, our local newspapermen, with lack of knowledge, always simplify critical points and vice versa. So, the reporting dd not reflect the reality.

Anyway, I expect this investment to be materialized because US oil companies will shortly start delivering oil or gas from the bottom of BoB.

Some of the information that I have found regarding this project so far is that if US will invest the money it will be under PPP format. Some of the report has indicated Bank of America has set up a fund of 50 Billion USD to invest at the renewable energy related projects. Some report exclusively said that it is meant for Bangladesh. As the report has indicated USA has stressed Bangladesh for gas exploration to meet energy needs. I think USA is try to get most of the gas exploration deal at the Bay of Bengal which so far Bangladesh government has denied except the 2 blocks which has already been awarded. I think this investment offer to lure Bangladesh more to give them the oil and gas exploration deal. I may be wrong but you can shed more light into it.

This is the news posted at the official website at the Dhaka Chamber of Commerce & Industries (DCCI):

DCCI organizes discussion meeting on 'Sustainable Energy for All Initiative'
16 Mar 2013

DCCI

A discussion meeting on "Sustainable Energy for All Initiative" between Dhaka Chamber of Commerce & Industry (DCCI) and the visiting U.S. govt. mission was held at DCCI on March 16, 2013. The delegation was led by Deputy Assistant Secretary of State for Energy Transformation of U.S.A. Dr.
Robert Ichord. "Sustainable Energy for All" (SE4ALL) is a joint World Bank-UN initiative with three broad objectives like increase energy access, promote renewables and improve energy efficiency.

DCCI President Md. Sabur Khan, welcoming the delegation said, Bangladesh has huge demand of alternative energy and invited companies of U.S.A. to invest in this sector. He said Sustainable Energy for All Mission (SE4ALL) can play a vital role to mobilze foreign investment in Bangladesh in this sector. He said Bangladesh government has initiated a Power and Energy Sector Development Roadmap (2010-2021) which has targeted to produce 20,000 MW power by 2021. He welcomed U.S. investors to invest in power and energy sector including alternative energy like renewable energy in Bangladesh. To ensure energy security in Bangladesh is very important for the economic development and industrialization. He informed that about 16% of global final energy consumption now comes from renewable resources and demand for renewable energy is increasing in Bangladesh
in recent days.

Deputy Assistant Secretary of State for Energy Transformation Dr. Robert Ichord said that U.S. companies are willing to invest in the energy and renewable energy sector of Bangladesh. He stressed on modernized policy frame work under PPP model in order to ensure better enabling
environment for investment in this sector. Bank of America is willing to provide 50 billion US$ funding to support this sustainable and renewable energy sector, he informed. He said in order to ensure energy security for all by the year 2030, government, private sector and donors are to work together. He suggested Bangladesh to give more concentration on gas exploration.

DCCI Senior Vice President Nessar Maksud Khan offered vote of thanks.

DCCI Vice President Absar Karim Chowdhury, Directors ASM Mohiuddin Monem, Khairul Majid Mahmud, Haider Ahmed Khan, FCA, Rizwan-ur Rahman, M Abu Hurairah, Kh. Shahidul Islam, Hossain A Sikder, Alhaj Abdus Salam and Md. Shoaib Choudhury were present and took part in
discussion.

Ms. Molly Ward, State Department Energy Bureau (State/ENR), USA, Ms. Elizabeth Wallace, Financing Consultant for State/ENR, USA, Mr. Pat Delaquil, SE4ALL Consultant for State/ENR, Mr. Francesca Costantino, U.S. Department of Energy, Mr. Alexander Gazis, Economic & Commercial Office, U.S. Embassy, Dhaka were also present.

This same report has been published in numerous other website...

The Financial Express
Date: 17 March 2013
Bank of America wants to provide $ 50b to support BD's renewable energy sector :: Financial Express :: Financial Newspaper of Bangladesh

The New Age
Date: 17 March, 2013
US cos keen to invest in renewable energy sector

The Independent
Date: 17 March, 2013
US companies keen to invest in local energy sector

The New Nation
Date: 17 March, 2013
The new nation Bangladeshi English newspaper

Daily Sun
Date: 17 March, 2013
http://www.daily-sun.com/details_yes_17-03-2013_US-investors-interested-to-invest-$50b-in-energy,-renewable-energy_440_1_3_1_2.html

Prothom Alo
Date: 17 March, 2013
এ দেশে জ্বালানি খাতে বিনিয়োগে আগ্রহী ব্যাংক অব আমেরিকা - প্রথম আলো

Ittefaq
Date: 17 March, 2013
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Samakal
Date: 17 March, 2013
সমকাল :: টেকসই জ্বালানিবিষয়ক সভা নীতি সহায়&#24

Bonik Barta
Date: 17 March, 2013
???? ?????? - জ্বালানিতে মার্কিন উদ্যোক্তাদের বিনি&#

Jai Jai Din
Date: 17 March, 2013
যায় যায় দিন :: অর্থ-বাণিজ্য :: জ্বালানি খাতে ব&#2495

Naya Diganta
Date: 17 March, 2013
http://www.dailynayadiganta.com/new/?p=141194

Sangbad
Date: 17 March, 2013
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[eastwatch]

Some of the information that I have found regarding this project so far is that if US will invest the money it will be under PPP format. Some of the report has indicated Bank of America has set up a fund of 50 Billion USD to invest at the renewable energy related projects. Some report exclusively said that it is meant for Bangladesh.

As the report has indicated USA has stressed Bangladesh for gas exploration to meet energy needs. I think USA is try to get most of the gas exploration deal at the Bay of Bengal which so far Bangladesh government has denied except the 2 blocks which has already been awarded. I think this investment offer to lure Bangladesh more to give them the oil and gas exploration deal. I may be wrong but you can shed more light into it.

The $50b investment offer is a two way street. USA helps us build the energy sector, and we lease them more blocks in the BoB. USA finds oil or gas, transport it to the mainland and BD produces electricity with it. Since USA will invest in the electricity production and sellng business, therefore, its investors will have no chance to lose money, because companies will be buying gas and selling electricity to the govt at pre-determined rates.

Whatever it may be, it is almost impossible to invest the entire money on only the renewable energy sources, at least not in the beginning. Many renewable sources will require extensive research locally. So, although the BD-US meeting was held under the auspices of renewable energy source, I have reasons to believe the sources will include also the non-renewable ones.

 

[kalu_miah]

Looks like AL is getting desperate trying to woo investment from America and score political brownie points. Question is if the US will take the bait, like they did during MUA/FUA era, or all these could turn out to be just another hoax to fool our gullible public.

Everything said in this thread is hot air unless we see a credible source, at least a report from western media or US media. Financial Express Bangladesh does not count as a credible source for most people, except for AL supporters and sympathizers in and outside Bangladesh.