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$16 lakh Japanese Grant for 2 Projects The government of Japan through its PHRD Grant program will provide $1,600,000 as grants to Bangladesh for preparing two projects on clean air and sustainable energy and water resources management. The World Bank (WB), which will administer the fund, and the government of Bangladesh signed two agreements in this regard at a simple ceremony at the Economic Relations Division (ERD). ERD Secretary Aminul Islam Bhuiyan and WB Country Director Xian Zhu singed the agreements. Of the total grant, $900,000 will be used for preparing the Clean Air and Sustainable Energy (CASE) and $700,000 for Dhaka Environment and Water Resources Management (DEWRM). The Ministry of Environment and Forest will implement the CASE project to strengthen infrastructure, institutional and regulatory framework for air quality management. "The project will address emission from major sources like industry and transport," said Mohammad Nasir, CASE Project Director. The grant will be used for feasibility study, detailed designs, and environmental and economic assessments by June 23, 2008, he added. The Local Government Division will prepare the DEWRM project aimed at promoting integrated pollution management in the watershed of greater Dhaka to improve environmental conditions. The grant would be utilized by July 7, 2008. WB to Provide $100M For Power Sector The World Bank has agreed in principle to provide Bangladesh $100 million. The money is for transitional budgetary support to minimize the deficit financing in the current fiscal year. It is also to continue the reform works in the country's power sector, officials said in Dhaka. Following a formal appeal made by the Bangladesh government in late July, the Washington-based development partner sent a letter to the Economic Relations Division (ERD) last week, saying it would start the process to release the budgetary support credit for the power sector reforms. "If the negotiation is completed by November, the World Bank will likely disburse the $100 million credit within December this year and the amount will be directly added to the national budget," said a senior ERD official. He also said after completion of an appraisal by the World Bank mission next month, the ERD would be able to complete the negotiations for the power sector budget support credit by November this year. Bangladesh government earlier requested the donor to continue their budget support in the fiscals beyond 2006-07 since the development support credit (DSC) has been discontinued. Ratan Tata Still Hopeful of Bangladesh Plans Their three billion dollar proposal for Bangladesh hanging fire notwithstanding, the Tata Group has said it is still keen on the projects. "We have decided to go to Bangladesh. But we have not received necessary approvals so far. Once we get the clearance, we will activate the projects", Ratan Tata, Chairman of Tata Group, told the company's annual general meeting in Mumbai recently. The Tata wants to set up a fertilizer, power and steel plants in Bangladesh. The company said Tata Power is interested in entering nuclear power market in India and is in talks with French group Areva for sourcing nuclear power equipment. Summit, Wartsila Sign Deal Summit Power Ltd, a local electricity generating company, has signed a contract with Wartsila Corporation of Finland for supply of a dozen of gas generator engines totaling around 105 megawatt power generation capacity to be installed in three locations of the country. This Tk 300 crore deal will help Summit set up three plants in Maona-Gazipur, Rupganj-Narayanganj and Jangalia of Comilla. The projects will be implemented against the recent award of build-own-operate deals to Summit by the government. The cost of electricity will be Tk 2.38 per kwh. Summit expressed hopes to implement these fast track projects in the most expeditious way. The plants will help the Palli Biddyut Samitys of these areas to become self-sufficient in electricity and more profitable than before. Muhammad Aziz Khan, chairman of Summit Group, and Alf Doctor, Director (Sales) of Wartsila Finland Oy, signed the deal in Vaasa, Finland recently. Summit Power, IIDFC Sign MoU Summit Power Limited and IIDFC (Industrial and Infrastructure Development Finance Company Ltd) have signed a memorandum of understanding under which IIDFC will act as the lead arranger for raising fund of Tk 3.88 billion through a debt instrument namely, zero coupon bond. Tauhidul Islam, Managing Director of Summit Power Limited, and Mahmood Malik, Managing Director of IIDFC, exchanged documents after signing the MoU. Md Matiul Islam, chairman of IIDFC, was present. Ayesha Aziz Khan and and Syed Fazlul Haque, Directors of Summit Power Ltd were present. Also present were Faisal Khan and Mahmud Hasan of the Summit and Kh Shafiqur Rahman and ASM Arif of the IIDFC. Summit will implement 110 MW power plant under the banner of Special Purpose Companies, owned by Summit Power Ltd. Emphasis on Nuclear Power Plants Participants at a discussion meeting urged the caretaker government to establish nuclear power stations in order to ensure adequate power supply in the country. They also said that nuclear technology should be used only for civilian purposes, not for military purposes. Bangladesh Paribesh Andolon (Bapa) and Physicians for Social Responsibility (PSR) jointly organized the discussion on 'Impacts of nuclear weapons on health & environment: Hiroshima to Bangladesh' at the National Press Club in the city to mark the Hiroshima Day. The meeting was addressed, among others, by Anwar Hossain, former Chairman of Bangladesh Atomic Energy Commission, Bapa President Prof Muzaffer Ahmad, former ambassador Waliur Rahman, PSR President Dr Kamrul Hasan Khan, Bangladesh Mahila Parishad General Secretary Ayesha Khanam and Bangladesh Sangbad Sangstha (BSS) Chief Editor Jaglul Ahmed Chowdhury. Tata Steel to Acquire 35% in Mozambique Coal Project Tata Steel Limited, India's largest private steel-maker, has announced it is acquiring a 35 percent stake in a coal project in Mozambique for 85.7 million dollars. Tata Steel Managing Director B Muthuraman said in a statement that the company has entered into a memorandum of understanding (MoU) with Australian company Riverdale Mining Ltd, which runs the coal project in Mozambique, to source coking coal to feed Corus steel plants in Britain and Europe and the Tata's units in India. Tata Steel acquired Anglo-Dutch firm Corus for 12.9 billion dollars this year to become the world's sixth largest steel manufacturer, said Muthuraman, adding that the agreement with Riverdale is in line with its strategy to move towards raw material security for its global business and enhance competitiveness. Meanwhile, Tata Steel is reported to be interested in buying a steel plant in Colombia to mark its presence in Latin America, a region with rising economic growth where the demand for steel is projected to go up considerably, according to London-based organization Steel Business Briefing. Tata Power Signs Contract with Toshiba Tata Power Company Limited, India's largest private power company, has signed a contract with Toshiba Corporation for supply of five 800 MW steam turbine generators for the first 4,000 MW ultra mega power project (UMPP) at Mundra, Gujarat. The scope of the engineering project contract with Toshiba Corporations includes design, manufacture, testing and supply of equipment related to the steam turbine generator packages for the five units of 800 MW each. They will also be associated with supervision of commissioning of the turbines. Tata Power will be the first company to usher in the era of 800 MW units in India. This move will also help accelerate the pace of the project by not only ordering the equipments quickly but also tying up with world technology providers like Toshiba and Doosan Heavy Construction Ltd., ahead of schedule, Tata Power said in a statement. "This agreement is a significant step towards our drawing on the technical expertise of a strong international player like Toshiba. This partnership will provide an excellent technical solution for Mundra UMPP which is also cost competitive," Prasad R. Menon, Managing Director, Tata Power, said. Pipeline Blast in Pabna, Sirajganj Gas supply to several upazilas in Pabna and Sirajganj remained off for many hours following an explosion in a pipeline of West Zone Gas Company in the river Nalka near the western end of the Jamuna Bridge recently. The Gas Company sources and locals said the pipeline running through the river Nalka exploded with a 'big bang'. On information, company officials rushed in but failed to fix the faults immediately, as the pipeline remained 13 feet under water and there were strong currents flowing in the river in spate for flooding. The authorities stopped the supply of gas apprehending any disaster. Gas supply to Pabna town, Ishwardi, Bera, Sathiya of Pabna and Ullapara and Shahjadpur upazilas of Sirajganj came to a halt following the blast. Bogra LPG Depot set to reopen soon The LPG depot of Bangladesh Petroleum Corporation (BPC) in Bogra is set to reopen in a few days to the dealers of 16 northern districts. The BPC set up the depot at Phuldighi in Bogra in 2002 to facilitate distribution of liquid petroleum gas (LPG) in the districts under Rajshahi division. Earlier this year the BPC shut down the depot due to a dispute over its rented premises. BPC officials expected that the depot would be reopened in a new place in a day or two. Before 2002, all the 460 dealers of the division had to depend on the lone LPG depot at Baghabari for taking delivery of the petroleum gas. Govt. Hosts Bibiyana Power Plant Road Show The inaugural conference for the road show promoting the Bibiyana Independent Power Plant was held at the Radisson Hotel in Dhaka. Over the next few days additional conferences are scheduled to be held in Dubai and Singapore on August 15 and 17th respectively. The site for this new Independent Power Producer ("IPP") project is in the northeast of Bangladesh, 180 km north-east of Dhaka, adjacent to the north pad of the Bibiyana gas field. The site is on the Kushiyara River. There is sufficient land to build a 330-450 MW power plant. A good supply of fuel is immediately available, and there is adequate water for a closed cooling system at the site. Even though there is no existing transmission facility for the evacuation of power, plans have been made to expand the 230 kV systems to Sylhet, which will put 230 kV in the vicinity of the Bibiyana site. A double circuit 230 kV line would certainly be adequate for evacuating 330-450 MW. The Power Division of the Ministry of Power, Energy & Mineral Resources (MPEMR) is responsible for the State's ownership, policy-making, unbundling, IPP program and regulation functions in the Bangladesh electricity sector. Currently, Bangladesh will maintain the single buyer model, the single buyer model will be a public entity, and initially, BPDB will act as the single buyer. Over the last 10 years, Bangladesh has experienced a net energy demand growth in the order of 8 percent per annum. This has been accompanied over the same period with an economic growth rate of 5 percent per annum. Peak electricity demand in Bangladesh is 5,000 MW. There has been a high correlation of electricity demand with GDP growth. The Government of Bangladesh produced GDP forecasts and the base case for GDP growth produces a net energy demand growth of 7.9 percent through 2025. Installed electricity generation capacity in Bangladesh is 5,275 MW. Electricity generation per head is among the lowest in the world, at about 165 kWh per year. Present generation capability is 4,200 MW and peak demand is around 5,000 MW, and is insufficient to satisfy current demand, so that load shedding during peak hours is a regular occurrence. The largest load center is Dhaka, with 47 percent of the country's load1, and the second largest load center is Chittagong. To address the deficit of generating capacity, GOB has developed a Power Sector System Master Plan that considers the addition of 17,700 MW of generating capacity by 2025. Electricity tariffs remained unchanged in Bangladesh between September 2003 and March 2007 despite significant increases in global fuel costs. This resulted in substantial financial losses for BPDB. The March 2007 increase of 5 percent on urban electricity retail supply, 10 percent on bulk supply and recent budgetary transfers from GOB are expected to provide some improvement in BPDB's financial situation. Natural gas is the primary energy source for Bangladesh with approximately 85 percent of existing and nearly all planned power generation being gas-based. The remainder comes from hydroelectricity and some fuel oil. As of June 2005, proved remaining reserves currently are 9.2 trillion cubic feet ("Tcf)2, proved + probable remaining reserves are estimated at 14.4 Tcf, and proved + probable + possible remaining reserves are estimated at 22.2 Tcf. Yet-To-Find ("YTF") reserves are the reserves that still have to be discovered. The gas demand significantly increased over the last 10 years reaching 1.3 billion cubic feet per day ("bcfd") in 2004 -2005. Wood Mackenzie, in their January 2006 Petrobangla Gas Master Plan report estimate that Bangladesh demand for gas will continue to grow and will reach a level of 5.6 bcfd by 2025 provided all the new gas-fired power plants envisioned by the Power System Development Plan ("PSDP") are built. This will require YTF reserves of 24 Tcf to fill the supply of gas in 2024-25 if all the present probable reserves can be converted to proven reserve. The Bibiyana gas field, Bangladesh's second-largest gas field, which is located onshore in Block 12, in the Habiganj district, 180 km North East of Dhaka, started trial production in March 2007. It is currently operated by a private international oil company under a production-sharing contract ("PSC") with the state owned oil and gas company, Petrobangla. The initial proven and probable reserve estimate of this field is 2.4 Tcf using a 76% recovery factor. The field might have a total potential of 5.5 Tcf gas considering proven, probable and possible reserves according to DeGolyer and McNaughton (D&M), an international consulting firm. The field is currently producing at 300-350 million cubic feet of natural gas per day (mmcfd), and the gas plant's full capacity of 600 mmcfd is scheduled to be available by late 2007. From the current trend, Petrobangla estimates that a 500-600 production from Bibiyana will be required by 2008. Bangladesh has had significant success in IPP procurement in the late 1990s. The projects of note are 1) Meghnaghat 450 MW combined cycle power plat and 2) Haripur 360 MW combined cycle power plant. Multilateral institutions and international commercial banks participated in the financing of these IPPs. The projects have been operating satisfactorily despite changes in ownership. In order to meet its growing energy needs, the Government intends to appoint a qualified investor to assist it in the development of the Project. The winning investor will enter into a 22 year implementation agreement with the Government to build, operate and own the project. The selection of the qualified investor or consortium will be carried out through a competitive bidding process. Over 75 invitees from Bangladeshi and international companies and banks as well as senior government officials attended the conference. In his address to the conference, Dr Fouzal Kabir Khan, the Secretary, Power Division noted, "The Bibiyana IPP project is an excellent opportunity for private sector companies to provide high quality competitively-priced power to help meet the growing energy needs of Bangladeshi households and industry. We are committed to ensuring a transparent competitive bidding process and plan to issue the pre-qualification documentation by the end of the month." The other speakers at the road show were. AMM Nasir Uddin, Secretary Energy Division, Md. Khizir Khan, Chairman, BPDB; Kazi Muhammed Aminul Islam, Secretary, Chief Advisor's Office; Major General Abdul Wadud, NDC PSC of Military Institute of Science and Technology. |
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