The government is moving ahead with a plan to open a $35 billion investment opportunity for private investors in the country’s power transmission sector.
According to official sources in the Power Division, the private sector`s enormous success in power generation has prompted the government to invite them to invest in the transmission segment of the sector.
The latest government statistics show the private sector’s contribution to power generation hit 11,057 MW representing 54.35percent while the public sector stands at 45.65 percent with its output of 9286 MW against the country`s total power generation of 20,343 MW.
Power Division officials claimed this substantial growth has been possible due to a favourable investment policy offered by the government over the last one decade.
“Seeing this great success, the government has now moved to unlock the investment scope for the private sector in the transmission segment as well,” Director General of the Power Cell Mohammad Hossain said.
Power Cell, a technical wing of the Power Division, which is responsible for preparing policy guideline and implement reforms in the power sector, has already started framing the proposed guideline by accumulating a number of models now being followed by different countries in this regard.
“We hope the guideline will be ready by January next,” said the Power Cell DG.
Official sources said as part of the Power System Master Plan, 2016, the Power Division outlined a $35 billion investment potentials in the transmission segment up to 2041.
As per the plan, the power transmission lines will be expanded to 36,870 kms across the country by 2041.
Of the total grid transmission lines, 16,655 kms will be of 132 kV while 9,717 kms of 230 kV, 1,740 kms of 400 kV and 796 kms of 765 kV, according to officials at the Power Division.
According to the Power Cell statistics, the total length of transmission lines at present are 11,123 kms covering all over Bangladesh. Of this, 132 kV transmission lines are 7,082 kms while 230 kV 3,343 kms and 400 kV lines are 698 kms. Until now, there is no 765 kV line anywhere in the country.
Power Division officials informed that a good number of foreign and local firms lined up with the government by placing their offers to express their intention for investment in the transmission segment.
They said that the transmission segment is coming into focus because of the government strategy to keep the power generation momentum continued until 2041 when electricity generation is planned to reach about 60,000 MW.
Power Division officials said the government envisioned a total of $216 billion investment in three segments of power sector—generation, transmission and distribution—up to 2041 from 2017.
Of this, it requires $150 billion in generation, $35 billion in transmission and $31 billion in distribution.
But so far the private investment is allowed only in generation segment while transmission and distribution segments are not opened for private investors.
With new policy guidelines coming into place, the transmission segment will be opened for private investors.
Mohammad Hossain noted that private sector`s involvement in transmission segment is a little bit sensitive as national security is involved in the sector.
But overcoming the security concerns, many countries including neighbouring India has allowed private investment in transmission segment.”The investment could be in private-public partnership (PPP) as well.”
Power Division additional secretary RahmatUllah Mohammad Dastagir in a recent presentation to a group of Chinese investor said the country needs an average $9 billion investment in power sector each year up to 2041.
Welcoming the government`s move for allowing private sector in the transmission segment, Imran Karim, vice president of Bangladesh Independent Power Producers Association (BIPPA), said the new scope will definitely encourage the private investors to continue their contribution in the country`s power sector development.
“Without a strong support from the state, it was not possible for the private sector producers to reach the milestone in power generation.”
According to BIPPA, the private sector has invested about $12 billion over the last 10 years by setting up more than 50 power plants.
BIPPA leaders said they have now planned to invest $50 billion in the next 12 years to keep up the private sector`s participation in power sector development.
The private investors want to invest as independent power producers (IPPs) as well as private partners via the public-private partnership (PPP) initiative to set up at least 55 plants to generate some 12,000 MW of power or more.