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| Bangladesh |
| Future of energy lies in coal |
| 2010-04-14 |
| [Bangla Daily Star] A high profile international conference yesterday recommended open-pit coal mining for Bangladesh, and urged the government to ease up the bidding and purchasing mechanism in the power sector to encourage private investment. The recommendation for open-pit mining was however somewhat guarded saying, "In terms of coal mining, it was recommended that the open-pit method should be followed wherever feasible. Any decision should take into account the issue of socio-economic context (rehabilitating the affected people) and loss of agriculture lands. Possible resistance against open-pit mining should be handled proactively." A mining authority could be set up to deal with the rehabilitation and relocation of affected people, and to ensure accountability and transparency, it added. The International Chamber of Commerce, Bangladesh (ICC,B) organised the conference titled "Energy for Growth", attended by delegates of leading energy firms and investment banks from 20 countries including Australia, China, Japan, Germany, the US, UK, and Bangladesh, at Radisson Hotel in the capital. The recommendations also include setting up more rental power plants, long term supply agreements with investors, adequate incentives for them, upward revision of tariff, and a strong political will for achieving energy security. Mahbubur Rahman, president of ICC, B informed the media about the recommendations the chamber received from different breakout sessions of the conference. The conference recommended that Bangladesh immediately starts modern, safe, and environment-friendly extraction of coal from Barapukuria, and Phulbari mines within the framework of a robust coal policy, although it added that liquid oil based power plants could reduce the energy crisis in a shorter term. A half of the 30,000 megawatt power generation target by 2020 have to be achieved through coal-powered plants, said the list of written recommendations. The ICC also said investors are attracted to emerging markets by their high GDP growth rates. Bangladesh is now attractive as its GDP has been growing by 6 percent a year on an average over the past five years despite domestic and international hurdles. Return from power project financing in Bangladesh is estimated at 20 to 25 percent, much higher than what it is in many other countries, it added. The risk factors however lie with the transparency of agreements, tariff structure, fuel supply, regulatory and legal framework, political risk, etc, it cautioned. The proposals for setting up independent power plants should be quickly and efficiently evaluated, recommended ICC adding, "Tender process must be simplified and made transparent within a specified timeframe, to enhance attractiveness of the sector to foreign investors." "More companies will come with their investments if the government makes necessary legislative changes in the mechanism of purchasing power from the private sector," said the ICC, B president. Capital market could be an excellent source of financing, giving a combination of debt and equity, the ICC recommendations said. Both the government and the private sector should act proactively towards developing a mechanism to track forecasts and projections with regard to prices of commodities such as gas, LNG, and coal in the future, it said. ICC, B vice-presidents Manzur Elahi and Latifur Rahman were also present at the media briefing. |
| Posted by:Fred |