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Tuesday, March 16, 2004

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Power sector to get $250m after 15 years

The Bangladesh Observer

The World Bank has decided to provide credits for generation of electricity in the public sector after 15 years, reports BSS.

The bank would provide three new power plants - two in the public sector and the other in the public-private joint venture - with 250 million US dollars to generate 670 MW electricity in the country, ministry of power sources said today.

Out of the total amount, 150 million dollars will be spent for the two public sector 110-mw plants at Siddhirganj and the rest 100 million dollars for the Sirajganj Power Company Limited, where the government will have a substantial share.

The bank had stopped providing credits for the public sector power generation since 1989. But it continued to provide funds for the private sector power generation, and the development of transmission and distribution system, which are still controlled by the public sector.

 “The credit for the public sector has already been approved by the World Bank headquarters and it would be released soon,” State Minister for Power Iqbal Hassan Mahmood told journalists after a meeting with the bank Country Director Christine Wallich.

Iqbal Mahmood said the Power Division of the government has already made a number of reforms and was working for completing the reform tasks within next one year.

The Power Development Board (PDB) would be made the holding company under the reform programme, while the other power plants would be made separate companies to run under a corporate culture.

The companies would run independently, while the PDB would play a supervisory role, he said. The power plants in the public sector are now under the direct control of PDB.

Christine said the World Bank would continue its support to the new projects including the Sirajganj 450-mw plant and a distribution company for Chittagong zone. The groundbreaking ceremony of the Sirajganj plant will be held at the end of April.

She, however, reminded that the corporatisation alone could not ensure smooth growth of the power sector unless transparency and accountability were not guaranteed to every new company.

Iqbal Mahmood, who listed a number of reform programmes during the last two years, told Christine that the reform measures could be faster if the management support was available from external sources.

“We have sought support from the bank to make our reforms long-lasting and sustainable,” the state minister said adding that “We want to develop a permanent entity of power companies which would become an independent unit in future.” 

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