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
.