The government is planning to mobilise $8 billion from equity markets to invest in power sector to generate 24,000MW of electricity within the year 2021.
The power division last week formed a high-powered committee to prepare a report on the ways and procedures to mobilise the fund.
The committee has been asked to find out the procedures for mobilising fund for implementing power projects by the companies under the power division.
It was also asked to find instruments to mobilise funds from stock market and identify power companies to offload shares in the market.
The committee was also tasked with preparing detailed recommendations for the fund mobilisation efforts.
Additional Power Division secretary Dr Ahmed Kaikawas has been made the convener of the committee with additional finance secretary ARM Nazmus Sakib, ICB managing director, representatives of BSEC and DSE and managing director of power companies as members. Power Division Joint Secretary Humayun Kabir was made the member secretary of the committee.
During a meeting at the end of last month, State Minister for Power and Energy Nasrul Hamid said the government will require around $8 billion to implement power projects till 2021 as part of its long-term plan for the power sector.
Prime Minister’s power and energy adviser Dr Tawfiq-E-Elahi told the meeting that the government has a target to generate 24,000MW of electricity by 2021 while another 40,000MW by 2030.
“The government faces trouble even after allocating the highest budgetary amount for the power sector,” he also said at the meeting.
He said the government has already increased electricity generation by borrowing loans from aid agencies, banks and financial institutions, adding that more funds would be required to import distribution and transmission lines.
The PM’s advisor also stressed the need for collecting funds from the stock market to meet the fund requirement for the power sector.
The Dhaka Electric Supply Company (DESCO) has already offloaded 25 percent share in the stock market while another 10 percent is in the pipeline. The Power Grid Company of Bangladesh (PGCB) has already offloaded 23.75 percent share in the market.
Bangladesh Securities and Exchange Commission (BSEC) member Arif Khan told a meeting that scripts of the two power companies are highly demandable in the stock market.
He also said the BSEC would help the power companies offload their shares in case they need to offload more shares or bonds.
“We will arrange a brainstorming session and hopefully will be able to mobilise $1 billion initially to implement some public-sector power projects,” the state minister for power and energy Nasrul Hamid told recently.
He said state-run oil companies like Padma, Meghna and Jamuna have already been listed in the stock market to mobilize funds for financing their own projects.
“We have a plan to issue shares, bonds and other financial instruments in the stock market for mobilising fund from public for the power projects,” he said.
The government has a plan to generate 4,607MW of electricity from public- owned power project by 2018, according to power division officials.
Besides, another 3,895MW of electricity would come from private power projects by the same period.
As per the long-term roadmap, the government will implement seven coal-fired power projects in the public sector having a total capacity to generate 7,315MW of electricity.
Besides, another 8,000MW and 3,660MW of electricity would come from coal-fired projects to be implemented in joint ventures and by private sector respectively.
“We would require soft loans or funds from the stock market to implement these mega projects as term loans will be risky for such projects,” an official concerned said.
The Power Division said it is concerned over the ‘investment risk’ associated with export credit agency (ECA) loans though it has already mobilised or has secured confirmation for funds worth $2.34 billion for implementing power projects from ECA funding.
Lately, the government has been facing difficulty in mobilising soft loans for mega power projects in the public sector, officials informed.
The government has so far invested $5 billion in power sector in last six years.
Country’s electricity generation capacity is 7,712MW as of May 6 this year.