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Robust increase in FDI

More than $15 billion in power sector in next two years


Bangladeshpost
Published : 03 Nov 2019 09:03 PM | Updated : 02 Sep 2020 07:22 PM

As the foreign investment in the power sector is showing an increasing trend, the country is likely to fetch at least $15 billion investment in the sector within next two years. A host of countries, including Russia, the United States, Germany, Japan, China, India and South Korea, has evinced keen interest to invest in the country’s power and energy sector due to its secure and investor-friendly environment, officials said.

Power Division sources said the country has witnessed an unprecedented development in the power sector in last one decade. And it has been possible due to the real-time sustainable planning and initiatives undertaken by the government of Prime Minister Sheikh Hasina.
Official said around $2.5 billion has been invested in the power sector to generate 2,000MW power in private sector last year. The government expected that more $15 billion will be invested in this sector by 2021.

According to sources at Power Division, the total amount of investment in the electricity sector between 2009 and 2017 was $8.9 billion. Of this, $4.8 billion was invested in the public sector while $4.1 billion in the private sector. State Minister for Power, Energy and Mineral Resources Nasrul Hamid said, ‘Bangladesh is an investor-friendly country whose power and energy sector is expanding day by day. Our target is to generate 60,000 MW of electricity by 2041. So there is a huge opportunity for investment in the sector. Many countries are keen to invest here.’

An eight-member visiting delegation of the Qatar, led by its State Minister for Energy Affairs Saad Sherida Al-Kaabi, expressed to invest in a bigger way in Bangladesh’s power and energy sector while meeting State Minister for Power, Energy and Mineral Resources Nasrul Hamid at Power Division office last month.

South Korea has shown interest to invest in 10 public-private partnership (PPP) projects in the aviation, rail and power sectors under government-to-government arrangements. It is expected that the projects will be finalised within next three months. A group of Chinese companies showed interest in investing in different sectors in Bangladesh.

They expressed the interest at a seminar on China-Bangladesh Investment Facilities organised by multinational professional services network, PricewaterhouseCoopers (PwC) at a hotel in the capital in August last. William Yuan, Partner of Global China Business Network, said they are looking for investment opportunities in Bangladesh. There’re a lot of investment opportunities in the infrastructure, energy and power sectors and in the economic zones of Bangladesh.

The US giant Blackstone has shown its keenness to invest in Bangladesh. The world renowned investment firm has recently made a proposal to build a 600MW gas-based power plant in a joint venture with a Bangladeshi company, which may further increase to 1300MW. Besides, the company has shown interest in constructing a 100MW solar power plant in the country. To this end, it has submitted a proposal to the power division, an official said.

Recently, Riyadh Cables Group Company of the Kingdom of Saudi Arabia has expressed its interest to invest in the power sector of Bangladesh. South Korean Prime Minister Lee Nak-yon expressed his government’s interest to invest in some emerging sectors of Bangladesh like infrastructure, power, information and communication technology, construction, ship building and energy for boosting business volume of the two countries.

State-owned North-West Power Generation Company Ltd signed a memorandum of understanding (MoU) with China’s state-owned CMC to develop 500-megawatt (MW) renewable energy-based power plant projects. Reliance Power, India’s largest energy company, will build country’s largest 718 MW gas-based power plant at Meghnaghat in Narayanganj. A contract, in this regard, was signed at the Power Division building on September 1 this year.

Meanwhile, a group of companies of the 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. In addition, Adani Wilmar Limited or AWL will set up a power plant with a generation 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 to 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.

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.

Earlier, the government signed a MOU with the US Company GE to build a 3600 MW LNG-based power plant. Russian Gazprom has also explored more gas fields in Bangladesh. Now they are interested to work offshore. The energy giant Gazprom is going to drill three exploratory gas wells in Bhola, and Gazprom has given a proposal for drilling 3 wells at a cost of around Tk 480 crore.

Aramco, a state-owned oil company of Saudi Arabia, has proposed for an investment to build a large oil refinery with the capacity of 20 million tonnes in Bangladesh, said an official source. German Ambassador to Bangladesh Peter Farenhold has said, “Bangladesh is an extraordinarily potential country. German companies are doing business fairly in this country. They want to invest more in different sectors, including power and energy.”

Recently, German company Siemens has signed a MOU with the Bangladesh government to build a 3600 MW LNG-based power plant in Payra. They plan to build another power plant with similar capacity at Moheshkhali in Cox’s Bazar.

Entrepreneurs of Thailand also want to invest in the power and energy sector. Thailand Investment and Economic Reforms Minister, Kobsak Putrakul, showed interest at two separate meetings with Bangladesh Economic Zone Authority (BEZA) and Bangladesh Investment Development Authority (BIDA) on May 2, 2018.

An official said, the government has undertaken 13 mega projects in cooperation with India, Japan, China, Malaysia, South Korea and Singapore to set up coal-based power plants.