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Power Summit 2011

Bangladeshs Power Sector: Investment Opportunities

Brig. Gen. (Rtd.) Muhammad Enamul Haq, MP State Minister, Power, Energy & Mineral Resources
March 01 , 2011

London
1

Bangladesh at a Glance
The Country : The Peoples Republic of Bangladesh

Capital
Area Population GDP Growth Rate

:
: : :

Dhaka
147,570 Sq. Km. 146 Million US $ 751 (FY 2010) Around 6 % (last 7 years)

Per Capita Income :

Bangladeshs Power Sector at a Glance (FY 2010)


Electricity Growth Generation Capacity Total Consumers Transmission Lines : 10 % in FY-2010 (Av. 7 % since 1990) : 5936 MW (January 31, 2011) : 12 Million : 8,500 km

Distribution Lines
Per Capita Generation Access to Electricity

: 2,70,000 km
: 236 kWh (incl. Captive) : 48.5 %

Present Structure of Power Sector


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

Regulator
Bangladesh 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

Present Power Generation Scenario


5

Present Generation Capacity (January, 2011)


Public Sector
SL. 1. 2. 3. Generation Capacity (MW)

BPDB APSCL EGCB Subtotal Private Sector IPPs SIPPs (BPDB) SIPPs (REB) 15 YR. Rental 3/5 YR. Rental Subtotal

2620 606 255 3481 (59 %) 1271 99 226 168 691 2455 (41 %)

1. 2. 3. 4. 5.

Total

5936

Considering 15-20 % Maintenance and Forced Outage, Available Generation Capacity is in the range of 4600 5000 MW without fuel constraint 6

Power Generation Capacity in Private Sector


Sl. No.
1 2 3 4 5 6 7 8 9

Name of Power Station

Unit Type

Haripur Power Ltd. Meghnaghat Power NEPC RPCL KPCL BMPP WESTMONT (WPL) SIPP (13 Plant) Rental -15 Years

CC

Commissioning date (Year) 2001 2002 1999 2000 1998 1999


2007-2009 2008-2009 2008-2010

Type of Fuel Gas Gas Gas Gas


F. Oil Gas Gas Gas F. Oil

Generation Capacity (MW)

235 450 110 175 106 70 325 168 691

Ltd.

CC
Reciprocating

Engine CC
Reciprocating

Engine
CT CT

(4 Plant)

Reciprocating

Engine
Reciprocating

Rental -3/5 Years (10 Plant) TOTAL (33 operators)

Engine

2,455
7

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

Energy Generation by Fuel Type in FY 2010


Hydro 2.50%

FO 3.00%

Diesel 1.76%

Coal 3.53%

Diesel 5.15% Furnace Oil 4.42%

Coal 2.19%

Hydro 4.23%

Gas 89.21%

Natural Gas 84.02%

Energy Generation(FY10): 29,247 Million Unit

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

Energy Growth in FY10 is about 10 % High Dependence on Gas


9

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 Efficiency improvement program Rationalize power tariff and life line tariff Cross Boarder Power Trade

Generation Expansion Plan and Implementation

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
12

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
13

Power Generation Projects up to 2016


Calendar Year Wise Projects Completion (From 2010 to 2016)
YEAR 2010 (MW)
Commissioned

2011 (MW)

2012 (MW)

2013 (MW)

2014 (MW)

2015 (MW)

2016 (MW)

TOTAL (MW)

Public Private

255 520

851 1343

838 1319

1040 1134

1270 1053

450 1900

1500 1300

6204 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%)

14

Successful Contract Signed since Jan 2009


Sl. No. Description No. of Projects Capacity (MW) 1753 1564 3317

01.
02.

Private Sector
(Rental)

19
15 34

Public Sector Total

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

30 Projects with capacity 2907 MW are under construction.


15

Projects Under Construction


Sl. No. 01. Description Private Sector
(Rental)

No. of Projects 15

Capacity (MW) 1343

02.

Public Sector
Total

15
30

1564
2,907

Details u/c
16

Projects Under Tendering Process: Contract within Next 6 Months


Sl. No. 01. 02. Description Private Sector (IPPs) Public Sector Total No. of Projects 26 5 31 Capacity (MW) 3106 1060 4166

17

Average Supply Cost and Bulk Tariff Requirement


6.00

5.00

4.00

4.68 Taka/kWh

3.00

2.00

2.37 Taka/kWh

1.00

0.00 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.)

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Investment Opportunity in Thermal Power Projects

Plan Projects Under Pre Tendering Process


Sl No. Description
SECTOR

Capacity (MW) 100 150 150 250 150 150 360 450

Fuel

Expected COD

Remarks

PUBLIC

1 2

Chapai Nababganj 100 MW Peaking

HFO Gas/ HFO

Sep, 2012

Procurement Process will start soon Tender invited recently

Mymensingh JV PDB & RPCL


Bhola 150 MW CCPP

June, 2012

Gas Coal

June, 2013 December, 2013

Barapukuria 250300 MW Coal (3rd Unit) Ashuganj 150 CCPP


Shikalbaha 150-225 MW CCPP

Final Feasibility Report submitted. Tender doc under preparation In house feasibility completed. DPP is under preparation. Preliminary Study going on Preliminary Study going on Finance: Kuwait Fund EOI invited for consultancy services. JICA will finance Preliminary works Finance: ADB
20

5
6 7

Gas
Gas/ HFO
Gas Gas

December, 2013
December, 2013
June, 2014 March, 2015

Bheramara 360 MW CCPP Ashuganj 450 MW CCPP

Sub-Total

1760

Plan Projects Under Pre Tendering Process


Sl Description Capacity (MW) Fuel Expected COD Remarks
PRIVATE SECTOR
1

Savar 100 MW Peaking Plant, Dhaka

100

HFO

January, 2013

PQ and RFP documents under


preparation.

Draft
2

Khulna South

1300

Coal

June. 2015

Agreement for Joint Venture between NTPC & BPDB is under preparation. Feasibility study is going on. Lland acquisition (1834 Acres) at Chalna, Bagerhat is under process

Chittagong

1300

Coal

Dec. 2015

Feasibility Study will start soon. Land acquisition (3188 Acres) near
Parki beach is under process

Sub-Total TOTAL

2700 4460
21

Khulna 1300 MW Coal: JV with NTPC

District: Upazila: Union: Mouza : Nos)

Total Area (acre):

Bagerhat Rampal Rajnagar and Gauramba Sapmari Katakhali, (4 Baserhula, Kaigar Daskati, and Kapasdanga 475+1,834= 2,309 acres

Distance from Important location Khulna City Mongla Port Proposed Khan Jahan Ali Air Port Sundarbans Proposed Deep Sea Port at Akram Point of Sundarbans 23 km 14 km 12.18 14 km 67 km

Chittagong 1300 MW Coal Project on BOO Basis


Project Status Land acquisition and doc preparation Procurement process will start soon Location:
District: Upazila: Union: Mouza: Chittagong Anwara Barasat,
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 Shah Amanat Int. Air Port 11.53 4.3 km

Project Boundary and Area: Chittagong

Project Location beside CUFL

Chittagong Urea Fertilizer Ltd

Long Term Generation Plan

Power System Master Plan- 2010 (up to 2030)


Updates of PSMP 2006: Due to change of planning perspective 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

27

Probable Power Generation: Primary Fuel Sources by 2030


Sl. No.

Description
Domestic Coal Imported Coal Domestic Gas/LNG Nuclear
Regional Grid Others (Oil, Hydro and Renewable) Total

Capacity (MW)
11,250 8,400 8,850 4,000
3,500 2,700

Probable Location (s)


North West Region at Mine Mouth
Chittagong and Khulna Near Load Centers Ruppur Bahrampur - Bheramara, Agartola Comilla, Silchar - Fenchuganj, Purnia-Bogra, Myanmar - Chittagong Near Load Centers

1
2 3 4 5

38,700

Road Map for Coal Power Development (as of 2030)


Domestic Coal

K-D-P 18x600MW USC


Import Coal

Khulna 2x660MW (Dom Future)


Zajira/New Meg 4x600MW Chittagong 4x660MW Matarbari 4x600MW

Sonadia 2x600MW

Railway
Coal Center

Total 18,000MW
Chittagong Matarbari Sonadia Island
: Potential Coal PS : Potential Coal Center : Ocean-going vessel : Transship

Generation Plan: From 2016 to 2020


Sl
1 2 3 4 5 6 7 8

Description
Dhaka North- 750 MW, CC Meghnaghat Large #3, 750 MW, CC Meghnaghat Large #4, 750 MW, CC Chittagong South 600MW #1ST Megnagatt 600MW #1 Keraniganj #1, 750 MW, CC Power import from Myanmar Rooppur Nuclear # 1, 1000 MW

Capacity
(MW)

Executing Agency
RPCL BPDB BPDB BPDB BPDB BPDB BPDB BAEC

Fuel
Gas Gas Gas Coal-I Coal-I Gas Hydro Nuclear

Expected COD
2016 2016 2017 2017 2018 2018 2018 2018

750 750 750 600 600 750 500 1000

B-K-D-P 1 600MW #1
B-K-D-P 1 600MW #3

600
600 600 1000

BPDB
BPDB BPDB BAEC

Coal-D
Coal-D Coal-D Nuclear

2019
2019 2020 2020
30

10 B-K-D-P 1 600MW #2 11 12 Rooppur Nuclear # 2, 1000 MW

Total:

8, 500

Renewable Energy Projects

31

Renewable Energy Projects


Sl. NO.

Location of the Project


Parki Beach, Chittagong Moghnamoghat, Coxs Bazar Hatia, Sandwip, and Monpura Islands Kaptai, Rangamati Sarishabari, Jamalpur

Capacity 100-200 MW 10 MW 4 MW 5 MW 2-4 MW

Type of Project Wind Power Wind Power Wind Power Grid Connected Solar PV Grid Connected Solar PV

1 2 3 4 5

6
7 8

RTC, Rajshahi
Rajabarihat Goat Development Farm, Rajshahi St. Martin Island

1 MW
2-4 MW 1.5 MW

Grid Connected Solar PV


Grid Connected Solar PV Wind and Solar Hybrid

32

Renewable Energy Projects

Rajshahi: Solar

Sarishabari, Jamalpur: Solar Parki Beach, Chittagong: Wind

Kaptai, Rangamati: Solar Coxs Bazar: Wind St. Martins Island: Hybrid
33 33

Policy, Incentives and Security Mechanism for Private Investment

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 through Implementation Agreement (IA) Assistance in getting clearances from various agencies

Attractive incentive packages

Major Incentives for IPPs


Private Sector Power Generation Policy

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


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

Repatriation of equity along with dividends.


Cont

Major Incentives for IPPs


Private Sector Power Generation Policy

Tax exemption and repatriation facilities on royalties, technical know how and technical assistance fees Avoidance of double taxation on the basis of bilateral agreements The Bangladeshi currency, Taka is freely convertible for FDI

Investment Environment
Project Agreements are of international standard with properly allocated risks; Project companies are making profit

IPPs and BPDB have met their obligations under the PPA without problems 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 all concerned

Investment Environment
Increasing demand for electricity ensures business opportunities Existing policy and concessions will be continued Tested and successful approach to IPP development and management 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 $ foreign exchange reserve indicates capability of IPP payment Sovereign Credit Rating BB - (Moodys) and Ba3 indicates better investment environment
(S&P)

Payment Guarantee
Implementation Agreement (IA) and PPA ensure fair and reasonable risk allocation, and payment by the Purchaser is guaranteed 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

Conclusion
Government is committed to realize its Vision for the power sector and the economic development of Bangladesh
Government is committed to ensure transparency and an level playing field in every aspect of the procurement process Government is committed to promote and encourage Private Sector Participation in power sector development

We look forward to your participation in the power sector development of Bangladesh

Thank you
Visit website: www.bpdb.gov.bd
for
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further information on power generation projects

Thank You

GROWTH IS REMARKABLY STABLE AGAINST ALL SHOCKS


Resilient growth despite regular political, environmental and external setbacks

Bangladesh has maintained consistent growth and never defaulted on its internal or external debt obligations despite 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

Cyclone 2B: Casualty: 400 people 8,000 cattle

Very severe tropical Cyclone BOB 01

Asian Economic Crisis

Very severe cyclonic storm BOB 06: 300,000 affected, 8755 homes destroyed

Slowdown after 9/11

MFA Phase Out

Oil Price reaches >US$100/b

Economic Crisis

7.0 6.3 5.9 6.0


Real GDP Growth (%)

6.6 6.4 6.0 6.2 5.7 5.2 5.3 4.6 4.9 4.4 5.3 6.0

5.4 5.0 5.0 4.6 4.9

4.0 3.3 3.0

4.1

2.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Tropical Cyclone 04B: Casualty: 650 people 17,000 cattle.

Most severe flooding in modern history : 66% of the land affected, 1000 deaths 26,000 livestock lost, 16,000 km roads damaged.

Severe Floods: 36% of the country flooded 36 mn people affected.

Cyclone Sidr: 3500 people killed Major floods: 500 died, 30% of the country affected

Tropical catastrophic cyclone

Natural Disasters

External Shocks

Linear Trend line (Real GDP Growth)

44
Source: Bangladesh Bank

Challenges
Primary Fuel Supply

Enhanced Gas Exploration, Production Domestic coal development Coal Import (long term contract) and deep sea port for coal handling LNG import
Project Financing

Ensuring financing for Public and Private sector projects is a major challenge Availability of foreign currency
Transportation of fuel and equipment

Infrastructure development by Railway


Dredging of river routes by BIWTA Capacity build up of BPC, Railway, R&H and BIWTA

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


Sl Projects Company's Obligation GOB/BPDB's role
Site will be provided through Land Lease Agreement.

1. Project Company shall obtain all necessary debt and equity financing.

2. Negotiate and execute the Engineering, Cooperate with all appropriate Procurement and Construction (EPC) third parties to facilitate all contract with the Contractor. infrastructure and utilities necessary for construction and operation of the Plant.

3. Design, engineering and construction in accordance with sound engineering and construction practices and Prudent Utility Practices.

Assist Project Company to obtain electrical energy for construction, Commissioning and Start-up.

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


Sl Project Company's Obligation GOB/BPDB's role
Assist Project Company in connection with negotiation and execution of the Fuel Supply Agreement.

4. Provide the necessary facilities and services for the safety, comfort and protection of its personnel.

5. Operate and maintain the Plant, in accordance with Prudent Utility Practices and Dispatch instructions.

Assist the Project Company in obtaining Government authorizations, permits and licenses.

Estimated Demand Supply Gap up to 2016 (Calendar Year)


January, 2011

Year
Max.Demand with DSM (In April) Gen addition Public Sector Gen. addition Private Sector
Regional Power Imp

2010 6454 255 520

2011 6765 851 1343 88

2012 7518 838 1319 83

2013 8349 1040 1134 500 161

2014 9268 1270 1053 1292

2015 10283 450 1900 128 15882 15247 12197 1914


19%
48

Capacity Retired Gen. Capacity (End of Dec) NET


Dependable Capacity (End of Dec) Max Surplus/Shortfall (In Summer)

5936 5699 4331 -2123


-33%

8042 10116 12629 13660 7720 5945 -820


-12%

9711 12124 13114 7575 57


1%

9578 1229
15%

10491 1223
13%

Estimated Demand Supply Gap up to 2016 (Calendar Year)


January, 2011
14000

12000

10000

8000

6000

4000

2000

0 2010 2011 2012 2013 2014 2015

Max.Demand with DSM (In April)

Dependable Capacity (End of Dec)


49

Mega Coal Projects in Khulna and Chittagong

Load Curve on August 20, 2010 (so far Maximum


5500 5000 4500 4000 3500 3000

Peak)

4699 MW (9:00 PM) 4692 MW (4:00 AM) 3911 MW (12:00 Noon)


Hydro COAL

SHORTAGE
OIL

P.GEN(OIL).

MW

2500 2000 1500 1000 500 0


0:0 0 2:0 0 4:0 0 6:0 0 8:0 0 00 10:

PRIVATE GEN.(GAS)

GAS

00 12:
Hour

00 14:

00 16:

00 18:

00 20:

00 22:

00 24:

GAS

PR+En.Curve!$V$33 GEN. (GAS)

P.GEN(OIL).

COAL

Hydro

OIL

SHORTAGE

Energy Generation: 99.13 M kWh

Energy Not Served: 3.13 M kWh

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