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Bangladesh Bank seeks Tk 200b sovereign guarantee for funding power sector
Bangladesh Bank (BB) has put forward three suggestions including a condition for government`s sovereign guarantee to mobilise Tk 20,000 crore (200 billion) for new investment in the power sector. The suggestions are floating Islamic bond with idle fund of the country`s Islamic banks, creating consortium of banks for large scale funding, and floating of bonds by the state-owned organizations in power sector. "We have submitted the suggestions to the government against the proposal of Tk 20,000 crore funding for new investment in the power sector," SK Sur Chowdhury said. He also mentioned the central bank has tagged a condition of providing sovereign guarantee from the government in financing the power sector by floating bonds and large bank loans. The suggestions as well as the condition of the central bank came against the backdrop of the government`s recent move to set up 18 new power plants having total capacity 2900 MW on a fast track basis within next one and a half year period. Of these, 7 plants having total 900 MW are planned to be set up on PDB`s own land while 4 plants having total 1000 MW would be set up in the private sponsors` lands and the 7 remaining plants having total 1000 MW in railway and sugar mills` unutilized lands. All these 18 plants of total 2,900 MW will be set up by private sector and the state-owned Power Development Board (PDB) will purchase electricity from these plants for a long term period of minimum 15 years. Official sources said the recent power crisis in the early summer prompted the government to take up these new projects to meet the power shortage before the next general election. They said initiating the move the Power Division invited a joint meeting of the prospective investors, banks, financial institutions, capital market representatives and other concerned ministries and government agencies to discuss their plan. The funding of the projects emerged as the big issue as implementation of the government`s new plan will require about Tk 20,000 crore. The existing banking law is also a barrier to the way of funding as any bank cannot provide a large loan to any client, which crosses the 25 percent limit of the bank`s total capital. Finally, the meeting formed a 10-member committee comprising Bangladesh Bank representatives and headed by an additional secretary of the Finance Ministry, to extensively examine the whole issue and find out solutions to resolve the funding problem. Officials said the Bangladesh Bank gave its suggestion during the meeting of the committee which held a number of meetings and now is in a process to finalise its recommendations. Sources said that the committee found that if banks and financial institutions go for large scale funding to any investor in power sector through creating consortium, in that case, there will be no need to amend the banking law. Bangladesh Bank officials also said that a big amount of fund could easily come from the idle money of Tk 5500 crore which remained unutilized with different Islamic banks of the country. The banks can float bonds to finance the projects. The state-owned PDB can float also bonds to raise a big fund through floating its own bond on the capital market. But in both cases, the central bank put a condition of providing government`s sovereign guarantee so that public or financial institutions can buy these bonds with trust and in risk-free manner. Power Division officials said they are still unaware of any suggestion of the central bank as they have not yet received the report of the additional secretary-led committee. They, however, said they have already completed the selection process of sponsors for a number of plants having total capacity of 1,800 MW. The proposals were sent to Prime Minister`s office for necessary approval, they added.       
Summit Power to invest US$ 1 billion in collaboration with GE and Excelerate in power generation
August 4, 2017 Friday 11:17 PM By News Desk, energynewsbd.com
Summit Power International Pte Ltd the Singapore incorporated power producer, on Friday announced collaborations to develop US$1 billion of gas-to-power generation and an offshore liquefied natural gas (LNG) import terminal. IFC, a member of the World Bank Group, has been engaged as the lead arranger for financing to develop the Meghnaghat II natural gas based combined cycle power plant, said a press release from Summit Power. Upon completion, Summit will have a total installed generating capacity of over 3,000 MW. The expansion in its core market coincides with Summit’s strategy to expand across emerging markets in the South-East Asia. To enable clean, sustainable power, Summit will be chartering a floating storage and re-gasification unit (FSRU) from Excelerate Energy for LNG storage and re-gasification services. GE, through GE Capital’s Energy Financial Services, and Summit have entered into a Memorandum of Understanding (MOU) for GE to potentially provide US $50 million of equity to Summit, to be used for the development of power projects in Bangladesh. In addition, GE Gas Power Systems will have rights to supply equipment for the power projects based on gas turbine technology and developed in the next 36 months by Summit. To make gas available for these projects, Summit LNG Terminal Company (SLTC) will sign the FSRU Time Charter Party agreement for 15 years with Excelerate Energy L P (Excelerate), the floating LNG specialist. The agreement is for the provision of one of Excelerate’s existing FSRU. The arrangements formalised at a signing ceremony at The Fullerton Hotel, Singapore in the presence of Kazi M. Aminul Islam, Executive Chairman of the Bangladesh Investment Development Authority, Abul Kalam Azad, Chief Coordinator, Sustainable Development Goals of the Prime minister office Bangladesh, Fazle Kabir, Governor of Bangladesh Bank, Lim Hwee Hua, former Minister, Prime Minister’s Office Singapore, Satvinder Singh, Assistant CEO of International Enterprise (IE) Singapore and Muhammed Aziz Khan, Chairman of Summit Group. The MoU with Summit and GE signed by Faisal Khan, Additional Managing Director of Summit Corporation and Banmali Agrawala, President and CEO, GE South Asia. Tariqur Rashid, Managing Director of SLTC and Karlman Tham, General Manager of Asia of Excelerate, signed on behalf of Summit and Excelerate respectively.  Aziz Khan, Chairman of Summit Power International said: “We are delighted to announce these significant projects valued at over US $1 billion over the next three years. The addition of these power projects is in line with our objective to grow our sustainable power capacity to empower nations and transform lives.” He said: This development is testament to our deep long-standing relationship with GE and IFC which began some 20 years ago. The Summit brand has grown from strength to strength over the past decade and today, our name is synonymous with “infrastructure for development. He also said: We are excited to begin working with Excelerate for the first time. As the partner of choice for global players in the region, we endeavor to become the leading provider of energy solutions in Asia and deliver sustainable long-term value to all our stakeholders. Banmali Agrawala, President & CEO, GE South Asia said, “The MoU is a step towards furthering GE’s strategic partnership with the Summit Group in the region. We will continue to evaluate collaborations that provide comprehensive energy solutions to Bangladesh, including in the form of technology, services and financing.” IFC Head of New Business Infrastructure and Natural Resources, Asia Pacific,. Lubomir Varbanov added, “We value our engagement with Summit, and have been actively supporting the group’s mission to bring sustainable long-term power solutions to Bangladesh. He said: Our strategic relationship with Summit goes all the way back to 1997, when IFC financed Khulna, followed by Bibiyana in 2015, and more recently, in 2016, through financing from IFC’s own account and mobilizing from IFC’s Emerging Asia Fund and EMA Power. IFC remains committed to paving the way for the country to achieve energy security, and we look forward to supporting Summit to help meet this objective in the region. Karlman Tham, General Manager of Excelerate, said: “We are pleased to be partnering with Summit on this very important project. We are confident our experience and expertise in FSRUs will ensurean efficient and reliable project for Bangladesh for the years to come.”    
Category: Business
Two power network expansion projects okayed
June 22, 2017 Thursday 12:57 PM By BSS
The Executive Committee of National Economic Council (Ecnec) approved two power network projects involving Tk 13,909.21 crore to expand electricity coverage in the country`s eastern and western parts. The approval came from an ECNEC meeting held at the NEC conference room in the city on Tuesday with ECNEC Chairperson and Prime Minister Sheikh Hasina in the chair. Briefing journalists after the meeting, Planning Minister AHM Mustafa Kamal said the ECNEC had approved a total of 12 new and revised projects involving a cost of Tk 30,343.222 crore. Of the total cost, Tk 25, 904.43 crore will come from the government exchequer, Tk 4,404.99 crore as project assistance while Tk 33.80 crore from own fund of the organizations concerned, he added. He said cost for the power network expansion projects for eastern part-Dhaka, Mymensingh, Chittagong and Sylhet division- is Tk 7,123.30 crore. The government will set up a 39,100-kilometer distribution line to give 13.70 lakh consumers electricity connections as part of the government move to bring entire population under power coverage by 2021, he added. As part of the power network expansion programme in western part, a 38.010-kilometer power distribution line will be installed at a cost of Tk 6,776.91 crore in Rajshahi, Rangpur, Khulna and Barisal divisions, said Kamal.
Category: Business
Tk 21,118 crore allocated for power, energy sector
June 1, 2017 Thursday 8:13 PM By News Desk, energynewsbd.com
Finance Minister AMA Muhith on Thursday proposed Tk 21,118 crore for Power, Energy and Mineral Resources Ministry in the budget for 2017-18 fiscal for the overall development of the power and energy sector. Of the total Tk 21,118 crore, the finance minister proposed Tk 18,894 crore for the power division and Taka 2,224 crore for the energy and mineral resources division.  The minister unveiled the national budget for the financial year 2017-18 (FY18) at Tk 4,002.66 billion in the Jatiya Sangsad (JS) in Dhaka. “Hopefully we will be able to supply gas to all industrial units by the end of 2018. In order to meet the growing demand of energy in the country, necessary steps are being taken to import LNG within the shortest possible time,” the finance minister said while placing the national budget in the Jatiya Sangsad.    He said Terminal Use Agreement (TUA) and Implementation Agreement (IA) have already been signed with a view to setting up a Floating Storage and Re-gasification Unit (FSRU) based LNG terminal in Maheshkhali on Build-Own-Operate-Transfer (BOOT) basis under Public-Private Partnership (PPP).   Muhith said a total of Tk 113 crore has been proposed to allocate in non-development for the energy and mineral resources division, while Tk 49 crore for the power division. “In 2009, our power generation capacity was only 4,942 megawatt. Now it has reached 15,379 megawatt. At the same time, system loss has been reduced to 9.3 percent from 15.6 percent,” he informed the House.
Category: Business
General Electric keen to invest more in BD
May 24, 2017 Wednesday 11:12 AM By UNB
General Electric (GE) has expressed its willingness to invest more in Bangladesh as it wants to expand its operations in the country, says its top executive. GE South Asia President and Chief Executive Officer Banmali Agrawala said this when a GE delegation led by him met Bangladesh Investment Development Authority (BIDA) Executive Chairman Kazi M Aminul Islam at the latter`s office here on Monday. GE has long been engaged in Bangladesh`s energy sector apart from working in the areas like healthcare, energy transmission and distribution and aviation. The BIDA Chief Executive highlighted the ongoing reform measures of the government to help expand trade and investment in Bangla-desh and ease doing business and introduce one stop services.
Category: Business
Bangladesh set to impose carbon tax in June
May 24, 2017 Wednesday 11:00 AM By Reuters
Bangladesh is set to impose its own carbon tax on fuel next month – despite the hugely climate-vulnerable country producing relatively tiny per capita emissions. The tax is expected to be put in place on June 1 as part of the country’s annual budget and will be part of a larger bundle of “green” measures, Nojibur Rahman, chair of the National Board of Revenue, told the Thomson Reuters Foundation in a telephone interview. Many businesses and environmental groups have welcomed the plan, saying that Bangladesh – one of the countries considered most threatened by climate change impacts – needs to make a strong statement as governments like that in the United States pull back from action on climate change. The new tax may not make any significant contribution to achieving the Paris Agreement’s goal of keeping average global temperature increases below 2 degrees Celsius above pre-industrial levels, they said. But “when a country pollutes, the other countries are also affected. So, we need to reduce carbon emission as much as possible and imposing a tax is only way to do it,” said Abdul Matlub Ahmad, outgoing president of the Federation of Bangladesh Chambers of Commerce and Industry. He said the tax would not only raise the price of using fossil fuels but the added income could help push more use of renewable energy. “If the government wants to cut the import duty on environment-friendly renewable energy products, it needs to charge taxes on polluters,” he said in a telephone interview. Bangladesh produces about 0.44 tonnes of carbon dioxide per person, much lower than the United States’ 16.4 tonnes, Australia’s 16.3 tonnes and Qatar’s whopping 40.5 tonnes, according to World Bank figures. RISING RISKS Carbon taxes – which raise the cost of using fossil fuels by creating a charge for the climate damage they do – are one of the simplest, most market-friendly ways of driving climate action, experts say. But they have proved politically tricky to put in place, and not just in poorer parts of the world where incomes are low and making fuel more expensive can be politically risky. But low-lying Bangladesh, which faces huge risks from sea level rise, worsening storms, floods, droughts and other climate change impacts, has made a name for itself as an international leader in climate action, particularly in terms of innovative adaptation to climate change. “Although our contribution to climate change is very nominal, we are one of the worst victims of climate change. Aware of the problem, we have the most successful and best climate change programmes the world has so far witnessed in any country,” Finance Minister A.M.A. Muhith, said earlier this month at a Dhaka summit on climate change and disaster risk reduction. While it seeks international finance to help with programmes to address climate change, Bangladesh also has paid for projects out of its own nationally funded climate change fund. M.A. Matin, general secretary of the Bangladesh Poribesh Andolon (Bangladesh Environment Movement), said in a telephone interview that any carbon tax would need to be accompanied a “long-term carbon reduction plan” from the government. In the short term, higher taxes on industry can drive up production costs, with those costs passed on to consumers. That might mean “it’s not a right method for reducing emissions,” he said. Md. Khalequzzaman, a Bangladeshi professor at Lock Haven University in Pennsylvania, said he believed that in a poor nation like Bangladesh industry – rather than consumers – should bear the cost of the new tax. “I feel that the financial beneficiaries of carbon emissions should bear the tax as a part of their corporate social responsibility. The ordinary people should not be burdened with the additional cost of using power,” he said in an interview. He suggested that alongside imposing the carbon tax, the government should look at developing renewable sources of energy in the country.
Category: Business
Bangladesh needs $50 billion investment in power and energy sector
May 12, 2017 Friday 8:16 PM By News Desk, energynewsbd.com
State Minister for Power and Energy Nasrul Hamid has urged the European entrepreneurs to invest in Bangladesh taking the business opportunity prevailing here as the country needs $50 billion investment in power and energy sector. He made the call while addressing a seminar on ‘Swedish Energy System and Sustainable Solution’ at the World Trade Centre at Stockholm in Sweden on Friday, said a Power, Energy and Mineral Resources Ministry press release. Power Cell Director General Mohammad Hossain and Sreda member Siddique Zobair made presentations on Bangladesh’s power sector and renewable energy sector in the seminar. Swedish ambassador to Bangladesh Johan Frisell and Director of Swedish Energy Agency Josephine Bahr Ljungdell were present at the seminar. Nasrul said many global agencies are appreciating the progress of Bangladesh as the government has ensured a business security while taxation system is easy and labour cost is very cheap. He mentioned that the IMF has termed Bangladesh 2nd fastest growing major economy in the world in its 2016 report while HSBC made a forecast that Bangladesh will emerge as a country of 23rd largest economy by 2050.   
Category: Business
‘US interest in Bangladesh energy sector growing’
April 18, 2017 Tuesday 1:47 PM By UNB
American public-and private-sector firms` interest in Bangladesh`s burgeoning energy and power sector is said to be `growing day by day`. US Ambassador to Bangladesh Marcia S Bernicat said this when she called on State Minister for Power, Energy and Mineral Nasrul Hamid at his office in the Bangladesh Secretariat on Monday, according to a press release from the ministry. She said some giant companies like Exelerate, SunEdison, and GE are interested to work in Bangladesh, noting that American firms intend to work in Bangladesh`s renewable energy sector as well. The ambassador discussed the US position on different issues in Bangladesh`s power and energy sector with Nasrul Hamid. Welcoming the US companies` interest in Bangladesh, the state minister said investment from American firms are still `very low` compared with companies from other nations. He sought the US envoy`s help in encouraging American companies to invest in Bangladesh. On the power and energy sector`s current and future plans and also its potential, the state minister said there could be road-shows or seminars for the US chambers and business communities to make them aware about the ongoing developments. He said primary energy, power transmission and power generation are the best sectors for American companies to invest in Bangladesh. "Bangladesh will welcome US investment in these sectors," Nasrul Hamid added. He pointed out Bangladesh is getting electricity from India under sub-regional cooperation in the energy sector, while import of power from Nepal and Bhutan are progressing along the right path. He noted that Bangladesh encourages government-to-government (G-to-G-) business with any country. Power Cell director general Mohammad Hossain was present during the meeting.
Category: Business
‘MCCI urges govt to review latest gas price hike decision’
March 8, 2017 Wednesday 11:48 AM By News Desk, energynewsbd.com
The Metropolitan Chamber of Commerce and Industry (MCCI) requested the government on Tuesday to review the latest gas price hike decision, taking into consideration its impact on national economy. The Bangladesh Energy Regulatory Commission (BERC) hiked gas price last time in 2015. This time BERC has hiked gas price in two phases, of which the first phase has come into effect from March 1. The second phase is scheduled to be effective from June. However, the High Court ordered suspension of the decision of second phase gas price hike for six months. "The MCCI believes that the proposed gas price hike will raise transportation cost, production and other related costs, electricity generation and fertiliser production costs, and costs of agri-products and essential commodities, which will raise inflation," the chamber said a press release. "The gas price hike is not tolerable for consumers. Besides, the hike, at this moment, may hinder the country`s economic growth and welfare." The release also said the decision on gas price hike came at the time, when demand of different consumer goods, including apparel items, is low, after Britain`s decision to exit the European Union. Besides, the cotton prices in Bangladesh have increased by 20-25 per cent during the last two months, but the prices of RMG items have not increased. The chamber also said power plants, which supply electricity to the industrial units, consume 40 per cent of the country`s total gas use. The price hike of gas, used for electricity generation, will destabilise competitive position of RMG, leather, footwear and other sectors. The MCCI said the untimely gas price hike will destabilise the competitive position of many sectors, including ready-made garment (RMG). "The export target that the government has set centring Vision 2021 and the goal set for uplifting the country to high-middle income status may be affected by the gas price hike." The chamber also requested the government to take steps for ensuring proper use of gas instead of misuse by dishonest means. It may help face the situation without raising gas price excessively. The MCCI, Dhaka further said common people are under tremendous pressure because of price hike of various essential commodities. The gas price hike will raise transport cost for them. The chamber requested the government to keep price of CNG (compressed natural gas), used in public transports, out of purview of the latest gas price hike. It also said in 2008 the government formed a gas development fund for raising capacity of local gas companies, although it did not happen. Rather financial deficit is rising, as international oil companies (IOCs) are supplying increased volume of gas. The government is raising gas prices at consumer level to meet the deficit. "This chamber thinks that the country`s energy sector may face major crisis and the economy may face increased risk, if gas price hike continues instead of carrying out reforms in gas tariff policy," the MCCI, Dhaka said.
Category: Business
Gas price hike will increase cost of doing business: DCCI
February 25, 2017 Saturday 10:14 PM By Staff Correspondent, energynewsbd.com
The decision of gas price hike on an average 23 percent will affect and increase cost of doing business and inflation in the country, said the Dhaka Chamber of Commerce and Industry (DCCI). DCCI thinks gas supply to the industries and households is still not sufficient. Moreover, this hike will increase price spiral in the retail market, said a press release on Saturday. It will also impede export competitiveness, manufacturing sector, increase transportation cost and overall cost of doing business. This decision will emerge a challenge for garments and local industries as they have to survive facing hard competition in the world market. Besides, gas based power generation, captive power generation and fertilizer production will also be costlier due to this gas price hike. DCCI urges the government to review the decision considering the present cost of doing business, inflation and greater interest of mass people. Moreover to improve gas crisis government may focus on using our locally extracted coal as well as strengthening Bangladesh Petroleum Exploration and Production Company Limited (BAPEX) for exploring new gas fields.    On February 23, Bangladesh Energy Regulatory Commission (BERC) raised gas prices for all consumers by 22.7 percent and decided to implement the hike in two phases. According to the new price, households using double burners have to pay Tk 800 each from next month compared to Tk 650 now, while those using single burners have to pay Tk 750 each against Tk 600. The prices would be increased again on June 1 by another Tk 150 for each gas stove.
Category: Business
FBCCI concerned at the proposed gas price hike
January 7, 2017 Saturday 10:51 PM By News Desk, energynewsbd.com
The Federation of Bangladesh Chambers of Commerce  and  Industry ( FBCCI ) is concerned at  recent proposal of the government to increase the price of gas is likely to have a detrimental effect on the investment and industrialisation prospects of the country which will in turn hinder the overall growth capacity of the Bangladesh economy. FBCCI is aware that 74% of our energy needs are met through natural gas and therefore it is imperative that the hike in gas prices will increase the costs of investment, production, and overall business activity, said a press release on Saturday. Bangladesh is now considered a global role model for economic development. To move forward in the current pace of growth and achieve the vision 2021, set out by the Prime Minister of the government of Bangladesh, Industrialisation has been given the highest priority with a view to achieving economic value addition, employment generation and resource utilisation. The business community is working hand in hand with the government to enhance the industrial sector contribution to GDP to 37% by 2021 from the present contribution of 31.54%. From 2011-2016, contribution of the industrial sector to GDP increased from 38.7% to 31.54%, which is 2.8% increase in just 5 years. However in the next five years (2017-2021), we need to increase the industrial contribution of GDP by minimum of 5.46% which implies that we need to double the current growth trend that we witnessed in the last five years (2011-2016). To take advantage of the immense investment potential that we have in Bangladesh, from the private sector we are striving to develop the industrial sector and industrial entrepreneurs. In this context we appreciate the role of the government in creating a congenial atmosphere that fosters both local and foreign investment. Initiative to develop the industrial infrastructure, transport and communication, planned 100 economic zones and many more activities of the government are truly commendable and we see their progress evident. However, for industrialisation, a major challenge apart from infrastructure development is the sustainability of gas supply and uninterrupted power supply. Further to attract investment in the industrial sector, ensuring adequate availability and stable-long term price policy of electricity, water, gas and land has become crucial, adjust this aspect with the present policy structure.  In September 2015, gas prices were increased for all classes of gas consumers. Within less than 1 year, once again in 2016, gas prices were proposed for an increase. We are apprehensive that it will not only seriously affect the cost of the utilities but also increase the other associated costs for businesses. This in turn will have the domino effect, leading to an even higher increase of general cost of living ie. inflation, affecting every resident of the country. From overall industrial gas consumption of 17%, textile (spinning, weaving, dyeing and finishing unit) and RMG sector are the major consumers. For this sector, higher gas price has increased the costs significantly but in the short run, they were not able to demand higher prices from their buyers, which has not only led to a loss of profitability but hindered the growth prospects of its industries. Presently, the spinning mills use captive power for ensuring uninterrupted power supply. Increasing the gas prices will affect the marginal industries’ capacity to avail this facility of captive power since the prices out of their reach and even force them to halt their operations. This gas price hike will also affect the export oriented industries, agriculture, steel, fertilizer, independent power producers, real estate and all other service sectors of the country. Apart from that, investors in heavy industries like LNG and LPG are already facing difficulties in preparing their business growth and investment plans due to the proposed gas price hike. In this context it is important to identify the other challenges of gas production and efficiency instead of adopting higher price policy. The prevalent problems associated with the gas sector could be solved by effectively addressing the issues of illegal gas connection, system loss, illegal billing activities, etc rather than just increasing the price of gas. According to the latest Bangladesh Economic Review, the estimated use of gas from 2016-2020 in the CNG, tea, commercial and fertilizer sectors will remain the same. However, the gas consumption of industry, power and house hold use is forecasted to increase. The use of gas for captive power will decrease. Till the end of 2015, gas production per day was 2,800 mmcf and it is expected to increase to 4,800 mmcf following the implementation of the planned activities of the government. Apart from that if gas production from the identified 28 offshore blocks is realized, and then it will increase our gas production capacity to a sustainable level to augment the growth target of the country. Taking stock of the prevalent situation, it is necessary to first and foremost encourage the entrepreneurs to establish power based industries instead of gas. Increasing the price of gas is not a solution. For the present gas based industries, it is important to ensure their gas supply and provide a stable price policy. From FBCCI, it is our understanding that the competitiveness of the industrial sector will be largely diminished. If we want the industrial growth to continue and achieve the vision 2021 target, attracting investment from home and abroad, a long term policy that would focus on price adjustments for every 5 years is essential.  
Category: Business
CVO Petrochemical approves 25% cash dividend
December 29, 2016 Thursday 11:06 AM By News Desk, energynewsbd.com
The annual general meeting (AGM) of CVO Petrochemical Refinery Ltd held at its Katalgonj head office in Chittagong recently approved 25 per cent cash dividend for the shareholders for the year 2015-16. Presided over by chairman of the company Shamsul Alam Shamim the meeting was attended by chief adviser of the company Mainuddin Khan Badal MP, managing director AHM Habibullah, directors Mohammed Amin, Emranul Haque and Md Mohsin Saki, deputy managing director Nizam Uddin Mahmud Hossain, CFO Mizanur Rahmam Zabed, company secretary Kaikobad Ahmed and senior officials. The AGM was also attended by Amirul Islam, chief officer of the audit firm KM Hassan & Co. In the meeting two independent directors Professor Md Hossain Imam and Captain (retired) Hassan Sayeed Monirul Alam retired after completion of the tenure while Murshedul Alam Quadery was appointed new independent director. The meeting mourned the death of the company`s sponsor director Nurul Alam Ansari and prayed for his departed soul. The shareholders, directors and officials joined the special prayer for the late sponsor director.
Category: Business
FBCCI seeks British investment in power, energy
December 21, 2016 Wednesday 12:06 PM By News Desk, energynewsbd.com
An FBCCI delegation, led by its president Abdul Matlub Ahmad, met UK Prime Minister’s Trade Envoy for Bangladesh Rushanara Ali at a city hotel on Tuesday. British High Commissioner in Dhaka Alison Blake, FBCCI first vice-president Md Shafiul Islam Mohiuddin, vice-president Mahbubul Alam and directors of the apex trade body were present at the meeting. The both sides discussed bilateral trade and economic cooperation, said a press release of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI). Abdul Matlub Ahmad sought British investment in the power and energy sector and emphasised the transfer of British technology to Bangladesh. He also expressed his interest to export pharmaceutical products to the UK and said FBCCI will send a business delegation to the UK soon. The FBCCI president urged the British MP to facilitate more Bangladeshi students in the UK universities. The FBCCI proposed forming a joint working committee under the leadership of both the British High Commission and the FBCCI to resolve the existing trade related issues. Md  Shafiul Islam Mohiuddin, first vice president of FBCCI informed the meeting that Bangladesh has been working to develop the labour standard, and has eliminated child labour from the industries. He requested the High Commissioner to arrange a catalougue show in Dhaka, so that the businssmen could interact each other. Rushanara Ali said the friendship between the UK and Bangladesh has developed a lot in the recent years. She assured that the trade between Bangladesh and the UK will not be hampered for Brexit, expressing her interest to work with Bangladesh on climate change issues. The UK is the third single largest destination for Bangladesh’s exports after the United States of America (USA) and Germany. Over the years, Bangladesh’s exports to the UK enjoy a steady annual growth. In 2015-16, Bangladesh’s export to the UK was US$ 3.81 billion against the import of US$ 0.28 billion.
Category: Business
DCCI organises seminar on issues and challenges of financial closure of mega power projects
August 13, 2016 Saturday 11:42 PM By News Desk, energynewsbd.com
Dhaka Chamber of Commerce and Industry (DCCI) organised a seminar on issues and challenges of financial closure of large and mega power projects at DCCI on Saturday. Economic Adviser to the Prime Minister Dr. Mashiur Rahman was present as the chief guest while Secretary of Planning Division Tariq-Ul-Islam was present as special guest in the seminar, said a press release. DCCI President Hossain Khaled in his address of welcome said power is the basic prerequisite for socio-economic development. Bangladesh aspires to heighten power generation capacity to 24,000 MW by 2021 and 39,000 MW by 2030, he said. He said local and joint venture initiatives of mega power plants are often being challenged by financing options including financial closure. He also said delay in financial closure hampers sourcing fund and projected date of commercial operations. With the view of settling financial closure in due course, he recommended to equip project implementation agencies including PPP office. He also proposed for a long term Power Financing Funding Facility likewise Investment Promotion & Financing Facility (IPFF) project can be introduced with the participation of Bangladesh Bank and all financial institutions. Mashiur Rahman, Adviser to the Prime Minister on Economic Affairs said, we have to create investors’ confidence for uninterrupted cash flow in the mega power projects. PPP initiative could be the best financing modality for mega power plants. In terms of investment, taxation policy should be consistent and attractive specially to the foreign investors. He said for a large power plant project of 350-400 MW capacity, management and skilled work force are crucial. In our country, 6 to 8 per cent inflation rate will not affect the economy, he further said.  He also said government can introduce long-term Bond system to mobilize fund for large and mega power projects. Secretary of Planning Division Tariq-Ul-Islam said that 100 per cent population of 6 Upazilas of Bangladesh are now have access to electricity. He said still there are problems in financing large power projects, land acquisition and legal vetting. But government is working hard to solve all these. He said government is planning to allocate a budget under the Finance Ministry from where investors can lend money for mega power projects before project approval and land acquisition. He also informed that government is strengthening Board of Investment (BoI).   Former Power Secretary Dr. M. Fouzul Kabir Khan presented the keynote paper. He that financial closure of large projects means the execution and delivery of the financing documents between the sponsors and the lenders that evidence sufficient financing for the construction, testing, completion and commissioning of the facility and evidence of the commitments for such equity as is required by the company to satisfy the requirements of the lenders. He said balance sheet, land acquisition, tendering methods, limited credit worthiness, legal vetting, procurement law, environmental and social resettlement issues are some of the challenges for financial closure of a large projects. Director General of Power Cell Engr. Mohammad Hossain said government is now generating 14,000 MW electricity and has a target to generate 24,000 MW by the year 2021 and 39,000 MW by the year 2030. He said government plans to procure 20-30 per cent power from the local investors. He also said that government has measured all aspects of environmental issues for Rampal mega power project and the project will not have any adverse effect on Sundarban. CEO of Riverstone Capital Limited Ashraf Ahmed and Vice President of IDCOL Tanvir A. Siddiqui also spoke as discussants. They suggested to raise fund from capital market for large and mega power projects and stressed for simplified credit disbursement process. DCCI’s Senior Vice President Humayun Rashid, Director Salim Akhter Khan, CEO of Bangladesh Infrastructure Finance Fund Ltd. (BIFFL) SM Formanul Islam, DCCI’s former President Engr. Rashed Maksud Khan and Convenor MS Siddqui also spoke on the occasion.  
Category: Business
Planned gas tariff hike to hurt textile sector
July 31, 2016 Sunday 8:49 AM By News Desk, energynewsbd.com
The proposed 130 per cent hike in gas tariff for captive power producers, if materialised, will negatively impact the country`s primary textile sector that is already hit by imports of cheaper Indian fabrics and yarns, industry insiders said. According to the proposed hike, gas price is scheduled to be fixed to Tk 19.26 per cubic metre from existing Tk 8.36 for captive power plants, while Tk 4.60 from existing Tk 2.82  and Tk 4.41 from Tk 2.58 have  been proposed for electricity producers and fertiliser factories respectively. The government in September last year made 100 per cent hike in gas price, which has impacted the cost and the profitability of the industry, they added. "Now, within a year there is a proposal to increase this further by 130 per cent. If the proposal is accepted, the cost of gas will go up 460.77 per cent in 12 months," said A Matin Chowdhury, managing director of Malek Spinning Mills Ltd. No industry in international trade can adjust such a big increase in price of utility within one year and this will be `impossible` for the industry to absorb, he said expressing the fear that such a hike could make the industry uncompetitive leading to the loss of exports, closure of spinning mills, job cut and fall in foreign exchange earnings and retention. "This will also cause financial crisis as mills will not be able to service their term loans and other debts taken from time to time," he noted. The proposed increase in the tariff of gas for captive power generation is much higher than any other consumers, particularly those involved in electricity generation, he said. "This will amount to punishing the industry on which the major part of export income of this country is dependent," he said. Matin estimated nearly 14 per cent of the total selling price of one kg of yarn that is $2.80 would be spent on gas once the proposed hike comes into effect. The textile mills have invested a large amount of money in captive power generation following the encouragement from government, especially the low gas price, said Tapan Chowdhury, president of the Bangladesh Textile Mills Association (BTMA).  Despite slow global demand, devaluation of euro and sterling in major importing countries, hike in recent raw material price, the industry is still maintaining its competitive edge, he said. But the proposed gas price hike will cut the industry`s competitiveness, he added. "Majority of the spinning mills, run through captive power generation, will not survive if such a hike in gas price is implemented," he said, noting there is no fresh investment in the weaving sector due to gas crisis.  There are some 430 spinning mills in the country. The primary textile sector supplies nearly 80 per cent raw materials to the knitwear industry and 40 per cent to the woven sector, according to the BTMA. According to industry insiders, the industry is under pressure from the global market -- compliance and incentive by competing countries like India and China. The Gulshan café attack has limited visits of buyers, making the business more difficult.  There is hardly any scope for the spinners to increase the price of yarn in line with the gas price as prices are set by the global market and Indian export prices, while duty-free import of yarn is allowed. The local market will be flooded with cheap Indian yarn and fabric resulting in shut down of local spinning mills, they added. The BTMA leaders requested the government not increase the gas tariff as proposed and establish a long-term pricing policy for a gradual increase after consultation. Source: The Financial Express
Category: Business
DCCI against gas price hike as it ‘may affect business growth’
July 21, 2016 Thursday 11:14 PM By UNB
The Dhaka Chamber of Commerce and Industry (DCCI) has expressed deep concern over the proposed gas price hike and urged the government to reconsider the decision. “In the greater interest of our accelerating economic growth, DCCI requests the government to reconsider the decision and not to raise gas price at this moment,” the trade body said in a statement on Thursday. The DCCI also advocated for adequate and regular gas supply to the industries to meet the increasing demand. “We should also look for alternative primary energy sources for future energy security.” The DCCI feels any gas price hike right now will fade the dream of graduating Bangladesh to a middle-income country by 2021 and becoming the 30th largest economy by 2030. The government, according to the DCCI, is planning to raise the tariff of natural gas again within a year. Quoting press reports, the DCCI said the government proposed 88 percent on average gas price hike and the public hearing will be held on August 7. The proposal includes 140 percent hike for domestic use, 130 percent for captive power plants and 62 percent for industries. Quoting the Bangladesh Energy Regulatory Commission (BERC), the chamber body said gas used in fertilizer-producing factories will see a rise of Tk 1.83 per cubic metre which is Tk. 2.58 now. Tk. 16.80 per cubic metre is proposed for domestic use which is Tk 7 now. A Tk 19.26 per cubic metre is proposed for captive power plants, which is Tk 8.36 now, it said. When the country is experiencing stagnation in adequate gas supply, the proposed 140 percent tariff rise will adversely affect the cost of doing business and inflation, export competitiveness and industrial production cost, the DCCI observed. Price hike of gas used in fertilizer production will increase the production cost of agricultural goods which may increase the overall inflation in the country. The fuel price in the international market is quite low than the previous years. The DCCI suggested the government to import this low-cost fuel from the international market to meet the domestic industrial demand as an alternative of gas price hike. “If price hike of gas comes into effect, the country’s RMG and other import substitute export-led industries may lose global market share,” the statement added. Besides, gas price hike may affect transportation cost, cost of doing business, cost of electricity production, cost of living, prices of essential commodities, the DCCI observed. Besides, it may create an excuse for illegal and immoral manipulation for price hike affecting purchasing power of common people.
Category: Business
Experts surprised at power and energy budget cut
June 2, 2016 Thursday 11:31 PM By Staff Correspondent, energynewsbd.com
Terming the slash of budget allocation in energy and power sector as a result of government’s inability to implement mega projects on time, experts concerned in the energy sector on Thursday said that it will not result any ‘significant’ change in the sector. The government has reduced down allocation for power and energy sector by 9.5% from the revised budget of the outgoing fiscal. A total of Tk 15,035 crore has been allocated for the sector in the proposed budget of fiscal year 2016-17 as against Tk 16,614 crore in the revised budget of FY 2015-16. Talking with energynewsbd.com, Prof Dr Shamsul Alam, energy advisor of Consumer Association of Bangladesh (CAB) said that that allocating budget for a sector was one issue and spending money wisely and methodically for the development of the sector was another. “We have to understand that most of the mega projects in the energy and power sector are being implemented with the help of foreign financing. Though government allocations supplement that foreign funding, getting that foreign money is not an easy task. So, the implementation of projects gets delayed and the money remains unspent. That’s why the budgetary allocation was decreased this year,” he added. He said that the government has a number of mega projects in its hand. “For the implementation of those projects, huge money will be needed. In most cases the government has gone for export credit agency (ECA) financing now which has complex terms and conditions. So spending money from the development budget in power sector will not be an easy task.” Prof Alam however said that this increase and decrease in budget will not affect anything at consumer level. “The reduction and increase of budgetary allocation in energy and power sector do not have any direct correlation at any effect at the consumer level.” Energy expert and Bangladesh University of Engineering and Technology (BUET) professor Dr Ijaz Hossain meanwhile said that the future of power and energy sector will be hampered without capacity building. He said that the size of the sector is increasing thus it needs increased amount of investment. "Not only that, for proper implementation of the projects, right person is needed to be choose and engaged for certain works," he said adding that proper corporate culture has to be incorporated here. About no provision of subsidy for BPC in this year`s budget, Ijaz said the profit which BPS makes since last year should be monitored for expenditure. Dr M Tamim, Professor of Mineral and Petroleum engineering of BUET told energynewsbd.com that there were several reasons for this relatively smaller budgetary allocation for the power and energy sector. These included the government’s intention of grabbing more private investment rather than spending from its own funds, failure to spend money from last year’s budget and the decreasing price of oil in the international market, he said.  
Category: Business
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