The World Bank will finance the Siddhirganj Peaking Power Project (SPPP) plant of about $275-million through concessional International Development Association (IDA) credits out of an estimated project cost of around $350-million.
SPPP plant will be state-of-the-art, with two 150 MW simple-cycle, gas turbines. Through this project the World Bank is supporting a Government’s initiative to reduce power shortages in the country. The proposed SPPP will reduce gaps in country’s power sector generation by adding 300MW to the existing grids.
Bangladesh suffers from an acute deficit of power generation capacity at peak times. To improve the situation, an estimated investment, both public and private, at Taka 700-billion, or roughly USD 10-billion per year, will be needed over the next 10 years.
A recent World Bank Mission concluded discussion with the Government on SPPP components that also includes environmental and social impact assessments of the project. The power plant will be owned by the BPDB-owned Electricity Generating Company of Bangladesh (EGCB), a new, corporatized entity, established for the purpose of owning and operating new and existing power stations. EGCB will also own another 240 MW to be built at Siddhirganj under a parallel Asian Development Bank project.
The project also includes gas and power transmission components. The power transmission line will be owned and operated by the Power Grid Company of Bangladesh (PGCB). SPPP will be run by an Operations & Maintenance (O&M) contractor hired from the international market for a period of six years. The O&M contractor will assist in institutional strengthening of EGCB over that period of time, in addition to the core O&M responsibilities.
In the past, the World Bank supported private generation capacity through the partial risk guarantee provided as part of the financing of the Haripur power project, now owned and operated by Globeleq. The International Finance Corporation (IFC), the private sector arm of the World Bank Group, is discussing with the Government to serve as transaction advisor for a new private power project in Bangladesh. IFC’s advisory services would come at no cost to Government or customers.
Addressing power sector problems requires time as a supply gap of 2,000 MW can be closed only over the course of several years through both public and private sector investment. A comprehensive reform plan is needed so that public entities perform better paving the way for donors support and private investment in this sector.
Contacts:
Rehnuma Amin (8802) 815-9015, Ext 4136, E-mail: ramin1@worldbank.org
for more information on the World Bank in Bangladesh, please visit :
www.worldbank.org.bd & www.worldbank.org
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