Bangladesh to open power transmission sector for private investment

Encouraged by the success of private players in the power generation, the Bangladesh government is opening up the power transmission sector of the country for private investors. This would create an investment opportunity worth USD 35 billion.

The latest government statistics show that out of the country’s total power generation of 20,343 MW, private sector’s contribution to power generation is 11,057 MW representing 54.35 per cent while the public sector stands at 45.65 per cent with its output of 9286 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 is responsible for preparing policy guideline and implement reforms in the power sector. It 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 USD 35 billion investment potentials in the transmission segment up to 2041.

They said that the transmission segment is in focus as the government intends to keep the power generation momentum going until 2041 when electricity generation is planned to reach about 60,000 MW. Under the plans, power transmission lines will be expanded to 36,870 km across the country by 2041.

Power Division officials said the government envisioned a total of USD 216 billion investment in three segments of power sector—generation, transmission and distribution—up to 2041 from 2017. Of this, it requires USD 150 billion for generation, USD 35 billion for transmission and USD 31 billion for distribution infrastructures.

So far private investment is allowed only in generation segment while transmission and distribution segments are not opened for private investors. The new policy guidelines will pave way for private investors in the transmission segment. Mohammad Hossain noted that private sector’s involvement in transmission segment is a bit sensitive issue as national security is involved.

But, many countries, including India, have overcome the security concerns to allow private investment in transmission segment. The investment could be under private-public partnership (PPP) as well.

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 is 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. Presently, there is no 765 kV line anywhere in the country.

Power Division officials informed that many foreign and local firms have shown keen interest in the sector and have made offers about their investment in the transmission segment.

Power Division additional secretary RahmatUllah Mohammad Dastagir in a recent presentation to a group of Chinese investor said the country needs an average USD 9 billion investment in power sector each year up to 2041.

Welcoming the government’s move for allowing private sector in the transmission segment, Vice President of Bangladesh Independent Power Producers Association (BIPPA) Imran Karim 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,” Karim added.

According to BIPPA, the private sector has invested about USD 12 billion in the field over the last 10 years by setting up more than 50 power plants. BIPPA leaders said they have now planned to invest USD 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 in the public-private partnership (PPP) initiative to set up at least 55 plants to generate some 12,000 MW of power or more.