12/09/2011: Govt okays seven power plants with overseas credit

The government yesterday approved setting up seven power plants partly with hard-term loans from abroad to lessen pressure on foreign exchange reserve and lower dependence on the private sector.

The approval came at a meeting of the cabinet committee on economic affairs with Finance Minister AMA Muhith in the chair.

According to a Power Division proposal, the plants with a total capacity of 1,455 megawatt will cost Tk 10,230 crore, of which Tk 6,770 crore or $900 million will come from overseas as supplier's credit.

A supplier's credit is extended to a buyer by a seller or supplier. It has a higher interest rate than soft loans and is required to be repaid within eight to 12 years.

The projects will be implemented through inviting open tenders. The successful bidders will collect foreign credit from the international market, according to the proposal.

The proposal also said, since February last year the Power Division has issued work orders to build 41 power plants with a total capacity of 4,504 MW. Of them, 14 units have already gone into production.

These plants will cost about Tk 38,510 crore, of which around Tk 28,000 crore or $3.97 billion will be spent from the country's foreign reserve.

The power plants will put pressure on the foreign exchange reserve, said the proposal, adding that the pressure would mount after work orders are issued for the new projects.

The production ratio of the existing public and private sector power plants is 53:47. After commissioning of the new plants, the ratio will be 45:55, the proposal said.

More power plants should be set up in the public sector soon to reduce dependency on the private sector, it said.

The proposed power plants are Shahjibazar 300 MW combined cycle power plant, Bibiyana III 450 MW combined cycle power plant, Barapukuria coal fired 250 MW thermal power III unit, conversion of Baghabari 150 MW gas turbine power plant to combined cycle, conversion of Shahjibazar 150 MW gas turbine power plant to combined cycle, Dohar 100 MW furnace oil based power plant and Chapainawabganj 100 MW furnace oil based power plant.

The cabinet committee also gave a nod to the proposal of giving the responsibility of overall evaluation of the benefits of the project on allowance for the elderly to Bangladesh Institute of Development Studies (BIDS).

The committee also approved a high-tech park under public private partnership at Kaliakoir in Gazipur district.

After the meeting of the economic affairs committee, a meeting of the cabinet committee on purchase okayed a proposal for importing 2.15 lakh tonnes of urea fertiliser. Of the amount, one lakh tonnes will be procured at $572 per tonne, while another one lakh tonnes will be bought at $584 per tonne, and 15,000 tonnes at $519 per tonne.