B'desh unveils six-bln-dlr plan to end power crisis

DHAKA: Energy-starved Bangladesh will invite tenders next month for a six-billion-dollar power plant building program to end a chronic fuel shortage in the fast-growing economy, an official said Saturday.

Most of the power needed to end Bangladesh's electricity shortfall would be produced at plants built by private companies to be selected by the government through competitive bidding, the official said.

"The government has approved the 410 billion taka (six billion dollar) plan," said the head of the Bangladesh Power Development Board, A.S.M. Alamgir Kabir.

"We will now interact with private companies and invite tenders next month (to build a number of power plants). Our target is to get rid of power shortages by 2014," Kabir told AFP.

Impoverished Bangladesh has long suffered severe power outages due to demands imposed by its economy, which has been growing at around six percent annually over the last five years.

The shortfall is especially acute in the hot summer months from April to October.

Years of under-investment have meant state-owned power plants generate only around 4,000 megawatts of electricity a day but demand is 6,000 megawatts and growing at 500 megawatts a year due to increasing industrialisation.

The World Bank and the Asian Development Banks say the acute power shortfall -- only 40 percent of Bangladesh's 144 million people have access to power -- has been a big drag on the country's bid to attain double-digit growth.

The power crisis forces some factories to halt production for at least three hours at peak periods, the central bank says.

Kabir said most of the new power would be generated by coal, diesel and furnace fuel, ending the country's long reliance on natural gas.

"We'll build four big coal-based power plants with capacity around 650 megawatt. The rest will be generated by using diesel and furnace oil. We will have an option for gas but there is no guarantee for supply," he said.

The hydrocarbon-rich South Asian nation had proven gas reserves of 15.37 trillion cubic feet, an amount which the government had believed was enough to last until 2025.

But with the manufacturing sector logging annual growth of nearly 10 percent since 2005, over half the gas reserves have been consumed. The state-owned gas monopoly Petrobangla says supply will dry up by 2019.

The government has suspended gas supply to hundreds of factories while half a dozen power plants cannot start operation due to lack of gas supply.

Kabir said the coal-fired power plants would take at least three years to build but the diesel and furnace-fired smaller plants can start producing power within nine months after commissioning.

"We're shifting our focus to coal from gas as the country has several high-class coal mines in the north. We may initially have to import coal, but in the long-term, our mines can supply our entire needs," he said.

But right now just one of Bangladesh's five top-quality coal mines are in production. The government is still deciding whether to use open cast or underground mining to extract coal from the other four mines.