Energy & Power

Snapshots

ADB Okays $465 M Power Sector Assistance

The Asian Development Bank (ADB) has signed an agreement with Bangladesh government for a $465 million loans for further development of the country’s power sector. The power sector program has two financing components, program loans and project loans. It is in line with ADB's country and strategy programs for Bangladesh.

Of the $465 million, project loans comprise $400million, program loans $60 million and the rest special loans.

The project loans with a 25-year term including a five-year grace period will be sourced from ADB's ordinary capital resources, while the $5 million loan from its special funds resources will have a 32-year term including an eight-year grace period.

The $400 million project loans will be used for expanding clean fuel generation capacity, enhancing transmission network reliability and efficiency and improving the quality of supply in the capital Dhaka and its surrounding areas, which make up the majority of the country's power demand.

The $5 million loan is meant for capacity development of the power sector to improve utility performance and promote sustainable operations.

The program loans of $60 million will be released in two stages. The loan carries a 24-year term including an eight-year grace period and will come from ADB's special funds resources.

The loan will also help reform the power sector through financial and organizational restructuring, improved governance and promotion of private sector partnerships.

Rahimafrooz Launches Jumbo IPS

Rahimafrooz has launched jumbo IPS (instant power supply) in Dhaka. Rahimafrooz Group Director Niaz Rahim, Rahimafrooz Distribution Ltd's Parvez Saiful Islam and other senior officials were present at the launching function.

The jumbo IPS has the capacity to run AC, fridge, microwave oven, and water pump during power outage.

Now 6-KVA and 10-KVA capacity jumbo IPS is available in local market.

Bangladesh to Seek World Bank Fund for Gas Exploration

Bangladesh will seek 150 million U. S. dollars worth of fund from the World Bank to finance exploration of gas. As the current reserve of the natural resource in the country will go dry by 2011, there was no option but to explore more gas, the Economic Relations Division (ERD) under the Finance Ministry said in its proposal which would be sent to the World Bank.

An ERD official said the ERD will send the fund proposal to the Washington-based donor within a short period.

Bangladesh has also appealed to the Washington-based lender for helping the state-owned Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) in its efforts to conduct seismic survey in different areas to find new gas reserve, drill at Semutang gas field in southeastern Chittagong region, and develop gas transmission and distribution systems.

According to Petrobangla, the national petroleum company, the total recoverable gas reserve at present in the country is less than 13 trillion cubic feet.

Naphtha Processing Plant Uncertain

A public-private joint initiative to set up a naphtha processing plant for producing octane from naphtha has become uncertain as the US energy company, Mobil, has virtually pulled out from the joint-venture initiative.

The Bangladesh-US joint venture Mobil Jamuna Fuel Company took up a project late last year to set up the plant to process naphtha, a by-product that is produced at the Eastern Refinery while converting crude oil into diesel and kerosene.

The company, a joint venture of East Coast Securities Ltd, state-run Jamuna Oil Company and the US-based Mobil, planned to invest $300 million to set up the plant.

It planned that initially the company would produce around 80,000 tonnes of octane and 10,000 tonnes of liquefied natural gas by procuring 1,00,000 tonnes of naphtha from ERL.

Sources in the Energy Division, however, said that Mobil recently told them that it was not interested in setting up the planned process plant.

“The US-based company is not interested to participate in setting up the plant as it is getting more and more interested in worldwide oil exploration and production,” said a source.

Energy Secretary AMM Nasir Uddin, who is chairman of the company, confirmed that Mobil was no longer interested in investing in the proposed plant. “The proposed company is now looking for partners and financiers, including the International Finance Corporation of the World Bank, for setting up the plant. It may hire consultants from Mobil,” he said.

He said that the company wanted to set up the plant to save its foreign exchange as the country imports around 1.5 lakh tonnes of octane.

The Eastern Refinery produces around 1,50,000 tonnes of naphtha while processing 14 lakh tonnes of imported crude oil.

As there is no domestic demand for naphtha, the Eastern Refinery sells it to international buyers, but at a price $5-8 lower per tonne than that in the Singapore market.

“If we could produce octane from naphtha, it would save foreign exchange on both counts — we could sell naphtha at a higher rate and save foreign exchange that is now needed for importing refined octane,” he said.

Chevron Supports 2 Permanent Smiling Sun Clinics

Chevron Bangladesh is assisting to set up two permanent Smiling Sun clinics near Bibiyana gas field. Its President Steve Wilson handed over a cheque of Tk 19.6 lakh to Sylhet Samaj Kallyan Sangstha (SSKS) for the clinics.

The clinics will offer health care services to people living in the two unions near the Bibiyana gas field, Inatganj and Dighalbak union of Nabiganj upazila under Habiganj district. Land for both clinics has been donated by the members of the respective communities.

Chevron supported Smiling Sun clinic has been providing health care services to around 6,000 people a month from a rented premises since May 4, 2005.

Also present during the cheque handover ceremony were, Robert J. Timmons, Chief of Party, NSDP; Naser Ahmed, Director, External Affairs, Chevron Bangladesh; Mary Lynn McKeon, Officer, Population, Health and Nutrition, USAID, Dhaka; and other officials of the respective organizations.

During the program, Steve Wilson praised the partnership forged among the organizations and the local community as the foundation for such a successful initiative. He said, “Chevron is extremely proud to support an endeavor that is providing critical health care services to the community near the Bibiyana gas field area.”

Chevron has also established a Smiling Sun clinic near the Moulavibazar gas field in Kalapur union of Sreemongal upazila under the district.

The Chevron funded Smiling Sun clinics are part of a wide network of 318 permanent and 8,212 satellite clinics run all over Bangladesh under a USAID supported health care program.

Govt won't Raise Fuel Oil Prices

The government will not make any upward revision in petroleum prices in the local market despite the recent rise in the prices of the same in the international market. "Though the prices of petroleum products have gone up recently in the international market we are not going to increase the prices of the same in near future," said Energy and Power Advisor Tapan Chowdhury.

He said the government hiked the petroleum prices in April last to make adjustment to rising prices of the item in the international market.

The Energy and Mineral Resources Division (EMRD) subsequently constituted an eight-member committee to monitor oil prices in the international market and recommend necessary adjustments locally.

The fuel oil price fixation committee is, however, has not met even once to discuss developments over petroleum prices in the international market and recommend adjustments.
As a consequence of the soaring oil prices, the Bangladesh Petroleum Corporation (BPC) has already incurred a financial loss of over Tk 1.50 billion last month, a senior EMRD official said. If the current uptrend in prices of petroleum products continues in the international market the BPC's loss might swell up further, he added. This might also frustrate the government's recent drive to bail out the state-run BPC from its huge debts.

The government has planned to assume the BPC's accumulated loans worth Tk 75.23 billion as its own liability by issuing bonds of equivalent amount.

ADB Eyeing to Boost Clean Energy Program

The Asian Development Bank (ADB) said it was planning to boost its clean energy program to one billion dollars annually amid warnings Asia's contribution to green gas emissions could get worse.

ADB President Haruhiko Kuroda said the region faced a "daunting challenge in securing energy" and expanding economies needed to spend more on clean energy technologies.

"About 70 percent of Asia's energy needs are dependent on fossil fuels -- a primary source of greenhouse gases. Asia now accounts for one quarter of the world's gas emissions," Kuroda told a regional clean energy forum.

"Without a change in course, it will get worse," he said, noting that the International Energy Agency estimates the region would have to invest up to five trillion dollars through 2030 on new energy infrastructure.

A major chunk of the investments would likely go toward coal-fired power plants to produce electricity, leading to global carbon dioxide emissions of over 40 billion tonnes in the next 23 years, he said.

Of the total emissions, 40 percent would be coming from Asia, Kuroda said, adding that this would also lead to an increase in global mean temperatures.

"Given this potential impact, issues surrounding energy security and sustainable development are central to Asia's future, and to the world's," Kuroda said.

He said developing countries should be encouraged to "explore possibilities for renewable energy sources, such as wind, solar and bio-fuels." They should also explore trade schemes or taxes on emissions to fund cleaner energy investment.