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Bangladesh and India: Delhi-Dhaka power project headed for financial mess: Think tank by Jyoti Mukul June 20,2016   |  Source: Business Standard

A US-based think tank says the Bangladesh-India Maitree project for a coal-based power unit could “effectively end up in a financial mess”. Proposed to be built near the city of Khulna, close to the Sundarbans mangrove forest, it is a joint venture between state- owned entities of the two countries. The Institute for Energy Economics and Financial Analysis (IEEFA) said electricity produced from the project would cost 32 per cent more than the average in Bangladesh, assuming an average plant load factor (PLF) of 80 per cent. This despite the project being heavily subsidised, "exposing investors, taxpayers and consumers to high risk, a potential stranded asset in the making". However, a senior executive associated with the project said the Indian government was not subsidising it but "only providing a loan through the Exim Bank to promote Indian investment in Bangladesh”. Ujjawal Bhattacharya, managing director, Bangladesh-India Friendship Power Company (BIFPCL), did not comment on the issue of rates for the power generated. He said coal-based generation was needed for the energy security of Bangladesh, which was planning to have at least half of an additional 30,000 Mw capacity from coal by 2030. “The Rampal power plant (the one being put up) is not the only coal-based

 

© 2015, Business Standard Ltd.

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