Bangladesh - Honourable State Minister

8/3/2019 Bangladesh - Honourable State Minister

1/51

Bangladeshs Power Sector: InvestmentOpportunities

1

March 01 , 2011

London

Brig. Gen. (Rtd.) Muhammad Enamul Haq, MPState Minister, Power, Energy & Mineral Resources

Power Summit 2011


2/51

Bangladesh at a Glance

The Country : The Peoples Republic ofBangladesh

Capital : Dhaka

Area : 147,570 Sq. Km. Population : 146 Million

Per Capita Income : US $ 751 (FY 2010)

GDP Growth Rate : Around 6 % (last 7 years)


3/51

Bangladeshs Power Sector at a Glance (FY 2010)

Electricity Growth : 10 % in FY-2010 (Av. 7 % since 1990)

Generation Capacity : 5936 MW (January 31, 2011)

Total Consumers : 12 Million

Transmission Lines : 8,500 km Distribution Lines : 2,70,000 km

Per Capita Generation : 236 kWh (incl. Captive)

Access to Electricity : 48.5 %

3


4/51

Present Structure of Power SectorApex Institution

Power Division, Ministry of Power, Energy & Mineral Resources (MPEMR)

RegulatorBangladesh Energy Regulatory Commission (BERC)

Generation Bangladesh Power Development Board (BPDB) Ashuganj Power Station Company Ltd. (APSCL)

Electricity Generation Company of Bangladesh (EGCB) North West Power Generation Company Ltd. (NWPGCL)Independent Power Producers (IPPs)

Transmission Power Grid Company of Bangladesh Ltd (PGCB)

Distribution Bangladesh Power Development Board (BPDB) Dhaka Power Distribution Company (DPDC) Dhaka Electric Supply Company Ltd (DESCO) West Zone Power Distribution Company (WZPDC)

Rural Electrification Board (REB) through Rural Co-operatives


5/51

Present Power

Generation

Scenario

5


6/51

6

Present Generation Capacity (January, 2011)

Public Sector

SL. Generation Capacity (MW)

1. BPDB 2620

2. APSCL 606

3. EGCB 255

Subtotal 3481 (59 %)

Private Sector1. IPPs 1271

2. SIPPs (BPDB) 99

3. SIPPs (REB) 226

4. 15 YR. Rental 168

5. 3/5 YR. Rental 691Subtotal 2455(41 %)

Total 5936

Considering 15-20 % Maintenance and Forced Outage, Available Generation

Capacity is in the range of 4600 5000 MW without fuel constraint


7/51

7

Power Generation Capacity in Private Sector

Sl.

No.

Name of Power Station Unit Type Commissioning

date

(Year)

Type of

Fuel

Generation

Capacity

(MW)

1 Haripur Power Ltd. CC 2001 Gas 235

2 Meghnaghat Power Ltd. CC 2002 Gas 450

3 NEPC ReciprocatingEngine

1999 Gas 110

4 RPCL CC 2000 Gas 175

5 KPCL BMPP ReciprocatingEngine

1998 F. Oil 106

6 WESTMONT (WPL) CT 1999 Gas 70

7 SIPP (13 Plant) CT 2007-2009 Gas 325

8 Rental -15 Years (4 Plant) ReciprocatingEngine

2008-2009 Gas 168

9 Rental -3/5 Years (10 Plant) ReciprocatingEngine

2008-2010 F. Oil 691

TOTAL (33 operators) 2,455


8/51

Demand Supply Situation

Generation: 4000 4600 MW (Capacity- 5936 MW)

Highest so far: 4699 MW( 20 August 2010)

Gas shortage causes 500 - 700 MW less Power Generation

Peak Demand: 6000 MW(with DSM)

Load shedding up to 1500 MW during hot summer days

Shortage and unreliable power supply has constrained

economic growth

8


9/51

FO

3.00%

Diesel

1.76%

Hydro

2.50%Coal

3.53%

Gas

89.21%

Energy Generation(FY10): 29,247 Million Unit

Energy Generation by Fuel Type in FY 2010

Energy Growth in FY10 is about 10 %

High Dependence on Gas

9

Energy Generation (July-Dec. 10): 14,451 Million Unit

Hydro4.23%

Natural Gas84.02%

Furnace Oil4.42%

Diesel5.15%

Coal2.19%


10/51

Priority area

Comprehensive and integrated plan for power generation,transmission and distribution sub sectors

Fuel diversity and sustainable supply of fuels

Private sector participation in power generation

Harnessing renewable energy sources

Demand Side Management (DSM) and Energy Efficiencyimprovement program

Rationalize power tariff and life line tariff Cross Boarder Power Trade


11/51

Generation

Expansion Plan andImplementation


12/51

12

Primary Fuel Supply Scenario

Gas:

- No significant gas discovery in recent years

- Present gas reserve is depleting due to increasing demand

- Present gas exploration initiatives may change the scenario

LNG: Necessary to ensure secure and reliable gas supply

Coal:Near term option; Indigenous or Imported; Base Load

Nuclear: Safe technology; No pollution; Expected to be future

Base Load option Oil:Volatile market; High price; For peaking duty


13/51

13

Generation Expansion Plan

Immediate:6 -12 Months- Rental Plants (liquid fuel)

Short term:18 - 24 Months- Peaking Plants (liquid fuel)

Medium term:3 - 5 years

- Combined Cycle Plants (Gas or dual fuel)- Peaking Plant (Gas or dual fuel)- Coal fired steam plants

` - LNG based Combined Cycle Plants

Long term:beyond 5 years- Domestic/Imported Coal Power Plant

- Gas/Oil based Peaking Plant - Nuclear Power Plant - Renewable Energy


14/51

14141414

Power Generation Projects up to 2016

Calendar Year Wise Projects Completion (From 2010 to 2016)

YEAR2010(MW)

Commissioned

2011(MW)

2012(MW)

2013(MW)

2014(MW)

2015(MW)

2016(MW)

TOTAL(MW)

Public 255 851 838 1040 1270 450 1500 6204

Private 520 1343 1319 1134 1053 1900 1300 8569

Total 775 2194 2157 2174 2323 2350 2800 14,773

Public Sector : 6204 MW (comm:255 MW, u/c: 1414 MW, Tender: 1420 MW); (42%) Private Sector : 8569 MW (comm:520 MW,u/c: 1343 MW, Tender: 2506 MW); (58%)


15/51

15

Successful Contract Signed since Jan 2009

Sl.No.

Description No. ofProjects

Capacity

(MW)

01. Private Sector(Rental)

19 1753

02. Public Sector 15 1564

Total 34 3317

Out of 3317 MW,410 MW(4 Project) already commissioned.

30 Projects with capacity2907MW areunder construction.


16/51

16

Projects Under Construction

Sl.No.


Capacity

(MW)

01. Private Sector(Rental) 15 1343


Total 30 2,907

Details u/c


17/51

17

Projects Under Tendering Process:Contract within Next 6 Months

Sl.No.


Capacity

(MW)

01. Private Sector(IPPs)

26 3106


Total 31 4166


18/51

1818

Average Supply Cost and Bulk Tariff Requirement

0.00

1.00

2.00

3.00

4.00

5.00

6.00

FY 2011

(July-Dec)

FY 2011

(Jan-June)

FY 2012

(July-Dec)

FY 2012

(Jan-June)

FY 2013

(July-Dec)

FY 2013

(Jan-June)

FY 2014

(July-Dec)

FY 2014

(Jan-June)

FY 2015

(July-Dec)

FY 2015

(Jan-June)

Av. Bulk Supply Cost (Tk/kWh) If Increased by 12 % (3 yr.)

2.37 Taka/kWh

4.68 Taka/kWh


19/51

Investment Opportunity

in Thermal PowerProjects


20/51

20202020

Plan Projects Under Pre Tendering Process

Sl

No.Description

Capacity

(MW)Fuel

Expected

CODRemarks

PUBLIC SECTOR

1Chapai Nababganj

100 MW Peaking 100 HFO Sep, 2012 Procurement Process will start soon

2Mymensingh JVPDB & RPCL 150

Gas/HFO

June, 2012 Tender invited recently

3Bhola 150 MWCCPP 150 Gas June, 2013

Final Feasibility Report submitted.

Tender doc under preparation

4Barapukuria 250-300 MW Coal (3rdUnit)

250 Coal December, 2013 In house feasibility completed.

DPP is under preparation.

5 Ashuganj 150 CCPP 150 Gas December, 2013 Preliminary Study going on

6Shikalbaha 150-225MW CCPP 150

Gas/HFO

December, 2013 Preliminary Study going on

Finance: Kuwait Fund

7 Bheramara 360MW CCPP

360 Gas June, 2014 EOI invited for consultancy services.

JICA will finance

8Ashuganj 450 MW

CCPP450 Gas March, 2015

Preliminary works

Finance: ADB

Sub-Total 1760


21/51

21212121

Sl DescriptionCapacity

(MW)Fuel

Expected

CODRemarks

PRIVATE SECTOR

1

Savar 100 MWPeaking Plant,Dhaka

100 HFO January,2013 PQ and RFP documents under

preparation.

2 Khulna South 1300 Coal June. 2015

Draft Agreement for Joint Venture

between NTPC & BPDB is under

preparation. Feasibility study is goingon.

Lland acquisition (1834 Acres) at

Chalna, Bagerhat is under process

3

Chittagong 1300Coal Dec. 2015

Feasibility Study will start soon.

Land acquisition (3188 Acres) near

Parki beach is under process

Sub-Total 2700

TOTAL 4460

Plan Projects Under Pre Tendering Process


22/51

District: Bagerhat

Upazila: Rampal

Union: Rajnagar and Gauramba

Mouza : Sapmari Katakhali, (4Nos) Baserhula, Kaigar

Daskati, and

Kapasdanga

Total Area (acre): 475+1,834= 2,309 acres

Distance from Important location

Khulna City 23 km

Mongla Port 14 km

Proposed Khan Jahan Ali Air Port 12.18

Sundarbans 14 km

Proposed Deep Sea Port at AkramPoint of Sundarbans 67 km

Khulna 1300 MW Coal: JV with NTPC


23/51

District: Chittagong

Upazila: AnwaraUnion: Barasat,

Mouza: Rangadia, Majerchar, Gobadia, (12 Nos)Paschim Tulatali, Phultoli,

Dudhkumra, Uttar Paruapara,

Boalia, Barasat, Chalitatali,

Paschim Chal and Bandar

Total Area (acre): 645+ 2543 = 3,188 acre

Distance from Important location

Chittagong Port 11.53

Shah Amanat Int. Air Port 4.3 km

Chittagong 1300 MW Coal

Project on BOO Basis

Location:

Land acquisition and doc preparation

Procurement process will start soon

Project Status


24/51

Project Boundary and Area: Chittagong


25/51

Project Location beside CUFL

Chittagong UreaFertilizer Ltd


26/51

Long Term Generation Plan


27/51

27

Power System Master Plan- 2010 (up to 2030)

Updates of PSMP 2006: Due to change of planningperspective

PSMP 2010 : Long term planning up to 2030

Findings:

- Generation capacity requirement by 2021: 24,000 MW- Generation capacity requirement by 2030: 39,000 MW

- Coal based generation capacity by 2030: 20,000 MW

- Coal and Nuclear for base load power requirement

- Import of Hydro Power from neighboring countries


28/51

Probable Power Generation:Primary Fuel Sources by 2030

Sl.

No.

Description Capacity (MW) Probable Location (s)

1 Domestic Coal 11,250 North West Region at Mine Mouth

2 Imported Coal 8,400 Chittagong and Khulna

3 Domestic Gas/LNG 8,850 Near Load Centers

4 Nuclear 4,000 Ruppur

5 Regional Grid 3,500Bahrampur - Bheramara, Agartola -

Comilla, Silchar - Fenchuganj,

Purnia-Bogra, Myanmar - Chittagong

6Others (Oil, Hydro

and Renewable) 2,700

Near Load Centers

Total 38,700


29/51

Chittagong 4x660MW

Import Coal

Road Map for Coal Power Development (as of 2030)

: Potential Coal PS: Potential Coal Center: Ocean-going vessel

: Transship

Khulna 2x660MW (Dom Future)

Domestic Coal

K-D-P 18x600MW USC

Matarbari

Coal Center

Zajira/New Meg 4x600MW

Chittagong

Sonadia Island

Railway

Total 18,000MW

Matarbari 4x600MW

Sonadia 2x600MW


30/51

30

Sl Description Capacity(MW)

Executing

AgencyFuel Expected

COD

1Dhaka North- 750 MW, CC 750

RPCL Gas 2016

2 Meghnaghat Large #3, 750MW, CC

750 BPDB Gas 2016

3 Meghnaghat Large #4, 750MW, CC

750 BPDB Gas 2017

4 Chittagong South 600MW

#1ST

600 BPDB Coal-I 2017

5 Megnagatt 600MW #1 600 BPDB Coal-I 2018

6 Keraniganj #1, 750 MW, CC 750 BPDB Gas 2018

7 Power import from Myanmar 500 BPDB Hydro 2018

8 Rooppur Nuclear # 1, 1000 MW 1000 BAEC Nuclear 2018

9 B-K-D-P 1 600MW #1 600 BPDB Coal-D 2019



12 Rooppur Nuclear # 2, 1000 MW 1000 BAEC Nuclear 2020

Total: 8, 500

Generation Plan: From 2016 to 2020


31/51

Renewable EnergyProjects

31


32/51

Sl.

NO.

Location of the Project Capacity Type of Project

1 Parki Beach, Chittagong 100-200 MW Wind Power

2 Moghnamoghat,

Coxs Bazar

10 MW Wind Power

3 Hatia, Sandwip, and Monpura

Islands

4 MW Wind Power

4 Kaptai, Rangamati 5 MW Grid Connected Solar PV

5 Sarishabari, Jamalpur 2-4 MW Grid Connected Solar PV

6 RTC, Rajshahi 1 MW Grid Connected Solar PV

7 Rajabarihat Goat DevelopmentFarm, Rajshahi 2-4 MW Grid Connected Solar PV

8 St. Martin Island 1.5 MW Wind and Solar Hybrid

32

Renewable Energy Projects


33/51

3333

Sarishabari, Jamalpur: Solar

Rajshahi: Solar

Renewable EnergyProjects

Parki Beach, Chittagong: Wind

St. Martins Island: Hybrid

Kaptai, Rangamati: Solar

Coxs Bazar: Wind

33


34/51

Policy, Incentives and

Security Mechanism forPrivate Investment


35/51

Private Sector Power Generation Policy

Tariff based bidding- Capacity Charge : ensures reasonable return on investment- Energy Charge :fuel cost is pass through item in the tariff

Sovereign guarantee from the Government for

obligations of Government entities throughImplementation Agreement (IA)

Assistance in getting clearances from various agencies

Attractive incentive packages


36/51

Major Incentives for IPPs


Exemption from corporate income tax for a period of 15years.

Plant and equipment (full value) and spare parts (10%of original plant cost) without payment of customsduties, VAT and any other surcharges.

Repatriation of equity along with dividends.

Cont


37/51

Major Incentives for IPPs

Tax exemption and repatriation facilities on royalties,technical know how and technical assistance fees

Avoidance of double taxation on the basis of bilateralagreements The Bangladeshi currency, Taka is freely convertible for

FDI



38/51

Investment Environment

Project Agreements are of international standard with properlyallocated risks; Project companies are making profit

IPPs and BPDB have met their obligations under the PPA withoutproblems or controversy and no conflict or major problems/issues

have arisen Increased interest reflected in the recent biddings by private

sector developers

Many IPPs are presently operating their businesses with local

managers, engineers and technical staff to the benefit of allconcerned


39/51

Increasing demand for electricity ensures business opportunities

Existing policy and concessions will be continued

Tested and successful approach to IPP development andmanagement will be continued;

Transparency and level playing field in the selection of Bidders

20 bn US $ export, 10 bn US $ remittance and 11 bn US $ foreignexchange reserve indicates capability of IPP payment

Sovereign Credit Rating BB - (Moodys) and Ba3 (S&P)indicates better investment environment

Investment Environment


40/51

Payment Guarantee

Implementation Agreement (IA) and PPA ensure fair and

reasonable risk allocation, and payment by the Purchaser isguaranteed by GOB

Two component tariff - Capacity Price and Energy Price -

ensures sufficient cash flow to recover investment and return Payments under the PPA continue in the event of fuel supply

disruption or dispatch failure

Payment under the PPA is ensured by Letter of Credit

Payment to Escrow Account ensures lenders re - payment


41/51

Conclusion

Government is committed to realize its Vision for the powersector and the economic development of Bangladesh

Government is committed to ensure transparency and an

level playing field in every aspect of the procurementprocess

Government is committed to promote and encourage Private

Sector Participation in power sector development


42/51

42

We look forward to yourparticipation in the powersector development of

Bangladesh

Thank you

Visit website: www.bpdb.gov.bd forfurther information on power generation projects
http://www.bpdb.gov.bd/http://www.bpdb.gov.bd/


43/51

Thank You

GROWTH IS REMARKABLY STABLE AGAINST ALL SHOCKS


44/51

44

6.0

5.7

6.26.4

6.6

6.0

6.3

5.3

4.4

5.3

5.9

4.9

5.25.4

4.6

4.9

4.1

4.6

5.0

3.3

2.0

3.0

4.0

5.0

6.0

7.0

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

RealGDPGrowth(%)

Source: Bangladesh Bank

Natural Disasters External Shocks Linear Trend line (Real GDP Growth)

Tropical Cyclone 04B:Casualty: 650 people

17,000 cattle.

Severe Floods: 36% of thecountry flooded 36 mn people

affected.

Cyclone Sidr: 3500 peoplekilled

Major floods: 500 died, 30%of the country affected

Tropical catastrophiccyclone

Most severe flooding in modernhistory : 66% of the land affected,1000 deaths 26,000 livestock lost,

16,000 km roads damaged.

Bangladesh has maintained consistent growth and never defaulted on its internal or external debt obligationsdespite the Asian and Global Financial Crises, numerous political upheavals and countless natural disasters.

This consistency is practically unrivaled amongst countries of a similar level of development

GROWTH IS REMARKABLY STABLE AGAINST ALL SHOCKSResilient growth despite regular political, environmental and external setbacks

Cyclone 2B:Casualty: 400 people

8,000 cattle

Very severe tropicalCyclone BOB 01

AsianEconomic

Crisis

Very severe cyclonic storm BOB 06:300,000 affected,

8755 homes destroyed

MFA PhaseOut

Oil Pricereaches

>US$100/b

EconomicCrisis

Slowdownafter 9/11

Challenges


45/51

Challenges

Enhanced Gas Exploration, Production

Domestic coal development Coal Import (long term contract) and deep sea port for coal handling

LNG import

Primary Fuel Supply

Ensuring financing for Public and Private sector projects is a majorchallenge

Availability of foreign currency

Project Financing

Infrastructure development by Railway

Dredging of river routes by BIWTA

Capacity build up of BPC, Railway, R&H and BIWTA

Transportation of fuel and equipment


46/51

Project Company's Obligation and GOB/BPDB's role

Sl Projects Company's Obligation GOB/BPDB's role

1. Project Company shall obtain allnecessary debt and equity financing.

Site will be provided throughLand Lease Agreement.

2. Negotiate and execute the Engineering,

Procurement and Construction (EPC)contract with the Contractor.

Cooperate with all appropriate

third parties to facilitate allinfrastructure and utilitiesnecessary for constructionand operation of the Plant.

3. Design, engineering and construction inaccordance with sound engineering andconstruction practices and PrudentUtility Practices.

Assist Project Company toobtain electrical energy forconstruction, Commissioningand Start-up.


47/51

Project Company's Obligation and GOB/BPDB's role

Sl Project Company's Obligation GOB/BPDB's role

4. Provide the necessary facilities andservices for the safety, comfort andprotection of its personnel.

Assist Project Company inconnection with negotiation andexecution of the Fuel Supply

Agreement.

5. Operate and maintain the Plant, inaccordance with Prudent Utility

Practices and Dispatch instructions.

Assist the Project Company inobtaining Governmentauthorizations, permits andlicenses.

Estimated Demand Supply Gap up to 2016 (Calendar Year)


48/51

48

Year 2010 2011 2012 2013 2014 2015

Max.Demand withDSM (In April)

6454 6765 7518 8349 9268 10283

Gen addition -

Public Sector255 851 838 1040 1270 450

Gen. addition -

Private Sector

520 1343 1319 1134 1053 1900

Regional Power Imp 500

Capacity Retired 88 83 161 1292 128

Gen. Capacity(End of Dec) 5936 8042 10116 12629 13660 15882

NET 5699 7720 9711 12124 13114 15247

Dependable Capacity

(End of Dec)4331 5945 7575 9578 10491 12197

Max Surplus/Shortfall

(In Summer)-2123 -820 57 1229 1223 1914

-33% -12% 1% 15% 13% 19%

Estimated Demand Supply Gap up to 2016 (Calendar Year)January, 2011

Estimated Demand Supply Gap up to 2016 (Calendar Year)


49/51

49

0

2000

4000

6000

8000

10000

12000

14000

2010 2011 2012 2013 2014 2015

Max.Demand with DSM (In April) Dependable Capacity (End of Dec)

Estimated Demand Supply Gap up to 2016 (Calendar Year)January, 2011


50/51

Mega Coal Projects

in Khulna andChittagong


51/51

Energy Generation: 99.13 M kWh Energy Not Served: 3.13 M kWh

Load Curve on August 20, 2010 (so far Maximum Peak)

GAS

PRIVATE GEN.(GAS)

P.GEN(OIL).

COAL

Hydro

OIL

SHORTAGE

0

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

5500

0:00

2:00

4:00

6:00

8:00

10:00

12:00

14:00

16:00

18:00

20:00

22:00

24:00

Hour

M

W

GAS PR+En.Curve!$V$33 GEN. (GAS) P.GEN(OIL). COAL Hydro OIL SHORTAGE

4692 MW (4:00 AM)

4699 MW (9:00 PM)

3911 MW (12:00 Noon)

51

Documents

Bangladesh - Honourable State Minister