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WB Concern over Bangladesh’s Expenditure of Electricity Buying

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WB Concern over Bangladesh’s Expenditure of Electricity Buying

Saturday, 11.06.2010, 08:25am (GMT)

Dhaka: The multilateral lending agency World Bank has expressed its concern over higher expenditure of the Bangladesh government to buy electricity from rental power plants and import fuel. The burden may restrict the country’s economic growth in the range between 6.1 percent and 6.3 percent.

World Bank organised a programme to explain the state of the Bangladesh economy and outlook for FY11 at its office on Nov 3).
Sanjay Kathuria, lead country economist of WB, in his presentation said in FY11, additional fiscal cost for the rental power will be ranged between Tk 52 billion and Tk 56 billion, which is about 0.6 per cent or 0.7 per cent of the GDP.

The additional fuel import bill can be between $300 million and $350 million, he said.The government has approved 28 rental power plants to provide electricity on emergency basis and those will be run by diesel and furnace oil.

The main challenge for the government is to ensure higher leverage over the fiscal costs that it will have to incur in buying electricity from the rental plants, Sanjay said.

The lead economist feared that overall power supply might not still be improved if existing plants suffer frequent disruptions.Sanjay said: “Economic growth is likely to pick up in the current fiscal from 6.1 per cent to 6.3 per cent, but there remain some significant downside risks”.The risks are slower energy delivery, real exchange rate rising, remittance decline and fragile global recovery, he said. However, the government has projected the growth rate at 6.7 per cent for the current fiscal.
 
WB Concern over Bangladesh’s Expenditure of Electricity Buying

Saturday, 11.06.2010, 08:25am (GMT)

Dhaka: The multilateral lending agency World Bank has expressed its concern over higher expenditure of the Bangladesh government to buy electricity from rental power plants and import fuel. The burden may restrict the country’s economic growth in the range between 6.1 percent and 6.3 percent.

World Bank organised a programme to explain the state of the Bangladesh economy and outlook for FY11 at its office on Nov 3).
Sanjay Kathuria, lead country economist of WB, in his presentation said in FY11, additional fiscal cost for the rental power will be ranged between Tk 52 billion and Tk 56 billion, which is about 0.6 per cent or 0.7 per cent of the GDP.

The additional fuel import bill can be between $300 million and $350 million, he said.The government has approved 28 rental power plants to provide electricity on emergency basis and those will be run by diesel and furnace oil.

The main challenge for the government is to ensure higher leverage over the fiscal costs that it will have to incur in buying electricity from the rental plants, Sanjay said.

The lead economist feared that overall power supply might not still be improved if existing plants suffer frequent disruptions.Sanjay said: “Economic growth is likely to pick up in the current fiscal from 6.1 per cent to 6.3 per cent, but there remain some significant downside risks”.The risks are slower energy delivery, real exchange rate rising, remittance decline and fragile global recovery, he said. However, the government has projected the growth rate at 6.7 per cent for the current fiscal.

Factory capacities sit at idle for lack f power. Kathuria on another article commented that Bangladesh exporters frequently pay higher air freights to meet deadlines for lack of power.

FDI is slow also for the same reason. Investors want to see Govt. is doing something about the power issues. Rental units are short term solutions till the larger plants come into production.
 
Isn't it possible to resort to windmills or other cheap ways to produce power?

Definitely it is a option... along with solar power... if I am not wrong I have seen a news where it was said that bangladesh is planning to co operate with germany for R&D and producing renewable energy... n as far as I know government has a road map to produce 10% of power from renewable energy...
 
we need extremely smart engineers and city planners to look after this matter and perhaps a better finance minister to use the budget wisely. Uneducated and inexperienced mps keep wasting money on stupid projects which the country never benefits.
I understand not all mps and ministers are corrupt but pissing money on stupid projects is not far off compared to corrupt mps and ministers.
 

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