Energy opportunities

An Expert's View about Electricity Generation and Distribution in Bangladesh

Last updated: 21 Jul 2011

The present Government has set ‘’Vision 2021’’ to move Bangladesh to a middle incomecountry by 2021. In line with this strategic vision, the Bangladesh Government hasundertaken massive programs forinfrastructure development in partnership with private sector including FDI, in particular, in the power and energy sector.

Sector briefing Energy opportunities in Bangladesh Why Bangladesh? According to the IMF Bangladesh?s economy is th now the 48 largest in the world, worth US$225 billion on a PPP basis. JP Morgan includes Bangladesh in their Frontier Five and PWC in their new PWC 30 list. Investors Chronicle, has indentified Bangladesh as one of the seven hottest emerging markets in the world The present Government has set ??Vision 2021?? to move Bangladesh to a middle income country by 2021. In line with this strategic vision, the Bangladesh Government has undertaken massive programs for overview of Bangladesh?s economy, business infrastructure development in partnership with culture, potential opportunities and an private sector including FDI, in particular, in introduction to other relevant issues. the power and energy sector. ?The revised private sector Electricity demand is increasing at the rate of 8-9% commensurate with GDP growth rate power generation policy of which will be 10-12% after 2012. Bangladesh Bangladesh provides a needs total US$13 billion investments in power number of incentives for the sector. The revised private sector power generation policy of Bangladesh provides a foreign investment in the number of incentives for the foreign power sector? investment in the power sector. Find general information on Bangladesh market conditions on UKTI?s website. The Doing Business Guide for Bangladesh gives an UK Trade & Investment Sector briefing: Power opportunities in Bangladesh Power Generation Capacity (8 May 2011) Opportunities There are total 36 private operators in the The Peoples Republic of Bangladesh covers an 2 country and they are generating 2827 MW of area of approximately 144 000 km and its power. Most of them are gas based with only geographical location is to the east of India. 106MW being generated from furnish oil. The Ready Made Garments (RMG) sector is a Demand Supply Situation major foreign exchange revenue generator for Bangladesh contributing 77% to the country?s ? Generation: 4300 ? 4700 MW net exports during 2009-2010. Garment (Capacity- 6361 MW) exports, totalling $12.3 billion in FY09 and ? Highest so far: 4724 MW ( 22 April remittances from overseas Bangladeshis 2011) totalled $9.7 billion in FY09 accounted for ? Gas shortage causes 600 - 800 MW less almost 25% of GDP. Power Generation ? Peak Demand: 6000 MW Statistics ? Load shedding up to 1500 MW during hot summer days GDP per capita (2010) US$685 ? Shortage and unreliable power supply GDP US$ 100.08 billion has constrained economic growth GDP Growth Rate (2010) 5.83%(Provisional)) Population (estimated) 156 million Priority Area Birth rate (Per 1000 Population) 20.4 Net population growth rate 1.39 % ? Comprehensive and integrated plan for Foreign exchange reserves £10.5 billion power generation, transmission and (Feb, 2010) distribution Inflation (Inflation January 8.14% ? Fuel diversity and sustainable supply of 2011) fuels Financial year July-June ? Private sector participation in power Source: Ministry of Finance generation including foreign investors ? Harnessing renewable energy sources Power Sector in Bangladesh ? Demand Side Management (DSM) and Energy Efficiency improvement program ? Rationalize power tariff and ?life line? It has been estimated that power outage in tariff Bangladesh results a loss of annual industrial ? Cross Boarder Power Trade output of $1 billion. Power is one of the major reasons of slow GDP growth and the Government of Bangladesh (GOB) has Primary Fuel Supply Scenario recognised the power sector as a priority sector. GOB has decided to build more power ? Gas: No significant gas discovery in projects through private sector and public recent years; offshore and onshore gas private partnership. exploration initiatives and increased reserves in present fields may change Bangladesh Power sector at a Glance the present scenario (FY2010) ? Coal: Near term option; Indigenous or Imported; imported coal might be ? Electricity Growth :10 % in expensive FY-2010 (Av. 7 % since 1990) ? Oil: Volatile market; High price; For ? Generation Capacity :6361 MW peaking duty (08 May, 2011) ? LNG: Necessary to ensure secure and ? Total Consumers :12 Million reliable gas supply but expensive option ? Transmission Lines :8,500 km ? Nuclear: Safe technology; No pollution ? Distribution Lines :2,70,000 but expensive option km ? Per Capita Generation : 236 kWh (incl. Captive) ? Access to Electricity : 49 % UK Trade & Investment Sector briefing: Power opportunities in Bangladesh CHALLENGES Opportunities Primary Fuel Supply GENERATION EXPANSION PLAN ? Enhanced Gas Exploration, Production ? Immediate: 6 -12 Months and - Rental Plants (liquid fuel) ? 60% allocation to Power ? Short term: 18 - 24 Months ? Domestic coal development - Peaking Plants (liquid fuel) ? Coal Import (long term contract) and ? Medium term: 3 - 5 years deep - Combined Cycle Plants (Gas or dual ? sea port for coal handling fuel) ? LNG import - Peaking Plant (Gas or dual fuel) - Coal fired steam plants Project Financing ? Long term: beyond 5 years - LNG based Combined Cycle Plants ? Ensuring financing for Public and Private ? - Domestic/Imported Coal Power Plant sector ? - Gas/Oil based Peaking Plant ? projects is a major challenge ? - Nuclear Power Plant ? Availability of foreign currency and GoB ? - Renewable Energy fund Between 2010 to 2016 the Bangladesh Transportation of fuel and equipment Government has plans to generate 14,773 MW of power. Among these 6204 MW which is 42% ? Infrastructure development by Railway of the total target will be from public sector. ? Dredging of river routes by Bangladesh 8569 MW which is 58% of the total target will Inland Water Transport Authority be from the private sector. From January 2009 (BIWTA) to May 2011, 1556 MW of power has been ? Capacity building of Bangladesh added into the system. A total of 30 tenders Petroleum Corporation (BPC), Railway, are under process which will bring an additional Roads & Highways and BIWTA 3879 MW. These tenders are expected to be floated within next 6 months. Contract Management RENEWABLE ENERGY PROJECTS ? Expert contract management team development There are plans for a number of wind and solar ? Reduction of project implementation power projects in the country including solar time Photovoltaic (PV) Plant at Kaptai, Chittagong, where free land is available with 4.38 Procurement Process 2 kWh/m /day. Expected capacity of this plant is 4-5 MW. GOB has also planned for a wind park ? Shortening of Tendering and approval at Anawara upazila, Chittagong. The wind process 2 Potential of this site is 177 W/m at 50 m and the average Wind Speed 6.7 m/s at 50 m Coordination among different entities height. Estimated Capacity will be 20 MW though the Government has plans for a final ? planning/implementation and operation 100-200 MW Wind Park at the same Site. ? Co-ordination in Demand Side Management (DSM) and Energy Also planned is another 10 MW wind power Efficiency Program plant at Cox?s Bazar and the Government is looking at setting up more solar PV plants in Human Resources Development the northern part of the country plus will undertake a wind mapping study of the coastal ? Development of skilled manpower; region very soon. Few of these upcoming adopt and operate new technology projects will be public sector whereas most of the projects will be undertaken by private If you have any questions about the sector. Some of these projects will be funded opportunities listed above, contact the UKTI by Asian Development Bank. Renewable Energy contacts named in this report. Business opportunities aimed UK Trade & Investment Sector briefing: Power opportunities in Bangladesh specifically at UK companies are added daily to UKTI?s website. These leads are sourced by our staff overseas in British Embassies, High Commissions and Consulates, across all sectors and in over 100 markets. You can be alerted to business opportunities on a regular basis by registering on the UKTI website. Find out more on UKTI?s business opportunities service on the UKTI website. UK Trade & Investment Sector briefing: Power opportunities in Bangladesh Major events and activities UKTI contacts th 1. 6 Power Bangladesh 2011 Qumrun Naher th Date: 13 ? 15 October 2011 Deputy Director of UK Trade & Investment For further detail, please visit British High Commission http://www.powerbangladesh.com/ UN Road, Baridhara Dhaka-1212 2. 2nd Solar Bangladesh 2011 Tel: +88-02-8822705-9, Ext: 2282# th Date: 13 ? 15 October 2011 Email: Qumrun.Naher@fco.gov.uk For further detail, please visit www.ukti.gov.uk http://www.solar-bangladesh.com/ Find full details of all events in this country and sector on the UKTI website. New export events are added daily to the site and you can register to be alerted to them on a daily, weekly or monthly basis UKTI?s Tradeshow Access Programme (TAP) provides grant support for eligible Small & Medium Sized Enterprises (SME's) to attend trade shows overseas. Find out more about UKTI support for attendance at overseas events. UK Trade & Investment Sector briefing: Power opportunities in Bangladesh Next steps - ? Arranging appointments How UKTI can help ? Organise seminars or other events for you to meet contacts and promote your British companies wishing to develop their company in the Bangladesh market business in the Bangladesh market are advised to undertake as much market research and This work is available via our Overseas Market planning as possible in the UK. UKTI?s team in Introduction Service (OMIS) a chargeable Bangladesh, with its wide local knowledge and service which assists British-based companies experience, can provide a range of services to wishing to enter or expand their business in British-based companies wishing to grow their overseas markets. business in global markets. To find out more about commissioning this This can include: work, or accessing other UKTI services and ? Provision of market information specialist advice, please visit the UKTI website ? Validated lists of agents/distributors to find contact details for your local UKTI ? Key market players or potential office. customers in the Bangladesh market ? Establishment of interest of such contacts in working with you Whereas every effort has been made to ensure that the information given in this document is accurate, neither UK Trade & Investment nor its parent Departments (the Department for Business, Innovation & Skills, and the Foreign & Commonwealth Office), accept liability for any errors, omissions or misleading statements, and no warranty is given or responsibility accepted as to the standing of any individual, firm, company or other organisation mentioned. Published 2011 by UK Trade & Investment. Crown Copyright © Published 2011 by UK Trade & Investment. ©Crown Copyright 2011 You may reuse this information (not including logos, images and case studies) free of charge in any format or medium, under the terms of the Open Government Licence. To view this licence, visit www.nationalarchives.gov.uk/doc/open-government-licence/ or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives.gsi.gov.uk This publication is also available from our website at www.ukti.gov.uk or for more information please telephone +44 (0)20 7215 8000. UK Trade & Investment Sector briefing: Power opportunities in Bangladesh
Posted: 21 July 2011, last updated 21 July 2011

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