Bangladesh announces power sector deregulation

DHAKA, December 9, 2010 (AFP) – Bangladesh has announced a sweeping deregulation scheme for its power sector in a bid to ease the country’s crippling electricity shortages, a senior government official said. Foreign investors will now be allowed to set up power plants without winning a government contract and to sell on the national grid, Toufique-e-Elahi Chowdhury, energy advisor to Bangladesh’s prime minister, said late Wednesday.

“We hope billions of dollars will now be invested by local and foreign entrepreneurs. This will boost electricity supply and foster industrialisation. It will also help us trim power shortages to zero by 2013,” he told AFP.

The government will buy 30 percent of the power produced by private companies and allow them to use the national grid to sell the rest of their electricity directly to consumers, at government-determined rates, he said.

Analysts welcomed the move, saying the current bidding process takes months, is often tainted with graft and favours incompetent firms with ties to the government.

The deregulation follows growing demand from the business community, particularly in the garment sector, to fix the country’s power crisis.

Bangladesh’s expo