The government has withdrawn the 70 percent foreign investment condition for power sector, aiming to utilise idle money, a top official said.
“We have withdrawn the investment condition for any power sector project as local banks and financial institutions have built capacity to invest here,” Power Secretary Dr Ahmad Kaikaus told the daily sun.
Earlier, the power division received a direction from the cabinet committee on public purchase to mobilise at least 70 percent of total investment from foreign resources, he said.
He said the power division has a plan to generate around 3,000MW of electricity through local fund by March, 2018.
“We are now scrutinising the proposals from different power sponsors and are hopeful that we would allow them soon,” he said.
According to the official sources, the state-owned commercial banks are allowed to provide 25 percent loan against the paid-up capital as per the Bank Company Act, 1991, Article-26 (Kha).
The power division proposes that the Banking Division should revise the Bank Company Act, 1991, Article-26(Kha) for large scale investment in power sector, an official confirmed.
The ministry of power and energy has formed a 10-member committee headed by Additional Finance Division Secretary Jalal Ahmed to review the act, the official said.
The committee also comprises Power Division Joint Secretary AKM Humayun Kabir as member secretary and representatives from Bangladesh Bank, Bangladesh Investment Development Authority, Banking Division, National Board of Revenue (NBR), state-run and private commercial banks, Bangladesh Power Development Board and Securities and Exchange Commission.
The power division will be implementing around 116 projects at an estimated cost of $24.73 billion. Of the total cost, around $13.78 billion will come from project aids.
The government wants to mobilise the rest of the fund through local banks and financial institutions.
The government will need around $85 billion by 2041 for implementing power transmission, generation and distribution projects.
The government is planning to implement the projects with funds from government-to-government deals, ECA financing and local banks.
The power sector has already received $8 billion in investment during the last eight years of the current Awami League government.
The government has already decided to utilise an idle fund of Tk 5,500 crore from Bangladesh Bank’s Islamic Development Fund (IDF) to invest in power sector.
Besides, the government will introduce ‘one-stop service’ centre for banks and financial institutions to fetch more investment in power sector.
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