part 1: overview of cogeneration and its status in asia - Fire

Summary of country study – Bangladesh 134
Table 3.1 Prevailing tariff for primary fuels and electricity
Primary Fuels Electricity
Type of fuel Market price (Taka)* Type of users Price (Taka/kWh)
Natural gas
1.68/m
Furnace oil
LDO
HSD
SKO
Fuel wood
3
Small industries:
flat rate
4.51/litre off-peak hours
peak hours
11.89/litre Commercial:
flat rate
12.41/litre off-peak hours
12.41/litre
peak hours
General use (11 kV):
2/kg (average)
flat rate
off-peak hours
peak hours
* Exchange rate (1998): 1 US$ = 48 Taka
3.30
2.55
4.75
4.45
3.10
7.10
3.10
2.50
5.75
The Government is restructuring the power sector and promoting private sector participation
in the generation of electricity for attaining higher economic efficiency. The Government is
strongly committed to attract private investment for installing new power generation capacity
on a Build-Own-Operate (BOO) basis. A Power Cell under the Ministry of Energy and
Mineral Resources (MEMR) was created in 1995 to facilitate promotion, development,
implementation, commissioning and operations of private power generation projects. The
modalities for implementing private power project are as follows.
Financing regulation
The funds for the private power projects will be raised without any direct sovereign
guarantee of repayment. The project sponsor(s) must look to the revenues earned by the
sale of electricity for their returns on equity and debt servicing. Minimum requirement for
equity investment will be 20 per cent. A Private Sector Infrastructure Development Fund
(PSIDF) will be established and money would be available at market-based interest rates
with extended maturity periods. As corporate debt securities market is essential for raising
local financing for power development projects, provisions for corporate bonds, shares and
tax facilities with the recognition by Securities and Exchange Commission (SEC) will be
allowed.
Security package
Model Implementation Agreement (IA), Power Purchase Agreement (PPA) and Fuel Supply
Agreement (FSA) will be prepared for private power projects to eliminate the need for
protracted negotiations. The government will guarantee power purchase agreement for
performance obligations of the concerned utilities and the performance of the fuel supplier,
which is a public sector organization. For private power projects, protection will be provided
against specific force major risk and changes in certain taxes and duties.
Allocation of project/plant site and provision of fuel
The government will select project/plant site in consultation with the investor/project sponsor,
and determine the fuel, keeping in view the preference for indigenous resources but the use
of imported fuels may also be allowed. Investors may be asked to bid for projects based on
renewable and/or non-conventional sources of energy.