Dhaka, 8 October 2006: Bangladesh’s
government has assigned the International Finance Corporation a lead advisory
role in designing an efficient framework for increased private investment
in the country’s power sector.
To begin, IFC will provide advisory services
on the design and implementation of a 450 MW independent power producer
(IPP) project. A signing ceremony for the project was held at the Bangladesh
Secretariat today. A. N. H. Akhter Hossain, Secretary, Power Division,
signed on behalf of the Bangladeshi government, while Denise Leonard signed
on behalf of the IFC, the private sector arm of the World Bank Group.
A. N. H. Akhter Hossain, Secretary, Power
Division, said, “Bangladesh is eager to design an IPP project that is
bankable, easy to implement, and can be extended to future projects. With
IFC’s support, we are confident of establishing this framework in line
with international best practices.”
Christine Wallich, World Bank Country Director
for Bangladesh, said, “There is an urgent need to invest in the country’s
power sector, but investment will not be forthcoming unless basic procurement
standards are met. The establishment of a transparent and efficient framework
for investment is a crucial step in bringing resources into the power sector
and removing a major constraint to the development of Bangladesh.”
Bangladesh’s electricity demand has grown
7 percent per year over the past 10 years. It is estimated that an additional
12,845 MW of capacity will be needed by 2020 to meet the gap between supply
and demand.
Iyad Malas, IFC’s Director for South Asia,
said, “We are pleased to participate in this project and partner with
Bangladesh’s government to establish an efficient and effective structure
that can act as a model to meet growing power demand. The initiative
will ensure the supply of affordable and reliable electricity through new
power generation with private sector participation.”
“This mandate from Bangladesh’s government
illustrates IFC’s commitment to encouraging private investment in key
industries in Bangladesh,” said Per Kjellerhaug, IFC Regional Representative,
Bangladesh, Nepal, and Bhutan.
Bernard Sheahan, IFC’s Director for Advisory
Services, noted that the assistance of donors will help develop an efficient
framework to attract private investment in Bangladesh’s power sector.
Donor support has been received from DevCo, a multidonor program affiliated
with the Private Infrastructure Development Group and supported by the
U.K. Department for International Development, the Dutch Ministry of Foreign
Affairs, and the Swedish International Development Agency.
Ingebjørg Støfring, Ambassador of the Royal
Norwegian Embassy in Dhaka, said, “Norway has supported the energy sector
in Bangladesh for several years. We are pleased to continue this in collaboration
with IFC, in support of new power generation capacity for the country.”
About IFC
The International Finance Corporation, the
private sector arm of the World Bank Group, is the largest multilateral
provider of financing for private enterprise in developing countries. IFC
finances private sector investments, mobilizes capital in international
financial markets, facilitates trade, helps clients improve social and
environmental sustainability, and provides technical assistance and advice
to businesses and governments. From its founding in 1956 through FY06,
IFC has committed more than $56 billion of its own funds for private sector
investments in the developing world and mobilized an additional $25 billion
in syndications for 3,531 companies in 140 developing countries. With the
support of funding from donors, it has also provided more than $1 billion
in technical assistance and advisory services. For more information, visit
www.ifc.org.