21 July 2006 – The World Bank has agreed to provide around $275m for a planed power project in Bangladesh in order to alleviate the current power crisis. Funding is for the 300 MW Siddhirganj Peaking Power Project (SPPP), estimated to cost in the region of $350m.
In a press release the World Bank would support the proposed SPPP through concessional International Development Association (IDA) credits.
The SPPP plant will be state-of-the-art with two 150 MW simple-cycle and gas turbines.
Bangladesh suffers from an acute shortage of power at peak times. To improve the situation, an estimated investment, both public and private, of Tk 700bn, ($10bn) will be needed to be made annually for the next ten years.
A recent World Bank Mission concluded discussions with the government on the SPPP components that include environmental and social impact assessments of the project.
The power plant will be owned by the Bangladesh Power Development Board-owned Electricity Generating Company of Bangladesh (EGCB), a new corporatised entity set up for the purpose of owning and operating new and existing power
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). The SPPP will be run by an Operations & Maintenance (O&M) contractor hired from the international market for six years.
The O&M contractor will help strengthen EGCB institutionally over the period 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), a 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 will be given at no cost to the government or customers.