The World Bank (WB) and the Asian Development Bank (ADB) have expressed their willingness to extend loans worth $210 million for setting up three power plants in the country, provided the management and operations of the plants are transferred to the private sector.
The WB is willing to provide $140 million dollar and the ADB, $70 million. The power plants will be of 150 megawatt (mw) capacity each.
The donors want the involvement of the private sector for the sake of transparency and efficiency, sources said.
"The government has already agreed to a proposal from the ADB and is now holding discussion with the WB on a similar proposal", Power Development Board (PDP) Chairman ANM Rizwan said while talking to the FE.
The ADB wants the government to set up a power plant having a 150 mw capacity at Siddhirganj and close down the existing 60 mw power plant at the same place, the PDB Chairman said.
But the PDB is now agreeable to the ADB proposal to remove the existing plant and has requested the manila-based multilateral donor agency to build a new power plant adjacent to the existing one, he added.
The WB intends to provide credit for establishing a peaking plant at Siddhirganj and another at the west zone of the country.
The PDB chairman said if the multilateral donors finally sanction the proposed credit lines, the country would be able to generate 450mw more electricity.
Rizwan claimed that private sector would be able to operate the power units more smoothly than the public sector entities.
"Power projects take quite a long period to come into operation due to bureaucratic tangles and other procedural delay. For instance, the Shiddhirganj power projects having 210 mw capacity of electricity had taken more than ten years for going into full-fledged operation", he lamented.
The donors are generally willing to finance fresh projects than the existing ones, he further said.
He said the government is now receiving satisfactory responses from the donors so far as the power sector is concerned.
The German lending company, KFW, has provided fund worth $45 million to build a substation in Bogra.
Besides, Japan Bank for International Cooperation (JBIC) has also provided financial assistance amounting to $215 million to establish three substations at Munshiganj, Daudkandi and Brahmmanbaria.
Asked about the government move to buy power from the rental power plants at higher prices, the PBD Chairman said, "We have to provide electricity to the power-starved people at any cost."
He, however, said that the government has to build small power plants to meet the existing demands immediately.
Referring the Kansat agitation, he said, "We do not expect another 'Kansat' to happen for power crisis".
Earlier, the government had turned down a WB proposal to allow foreign companies along with local ones to set up small power plants.