Dhaka, October 16, 2006—
The government of Bangladesh has appointed the International Finance Corporation to play a lead advisory role in designing an efficient framework for increasing private investment in the country’s power sector.
Initially, IFC will provide advisory services on design and implementation of a 450 megawatt independent power producer (IPP) project. At a signing ceremony in Dhaka, 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.”
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 a growing demand for power. The initiative will ensure an affordable and reliable supply of electricity by generating new power with private sector participation.”
Demand for electricity in Bangladesh has increased by 7 percent over the last 10 years, and it is estimated that in order to meet the gap between demand and supply, an additional 12,845 megawatts of capacity will be needed by 2020. This increased capacity will provide cheaper electricity and alleviate the country’s power shortages.
Bernard Sheahan, IFC’s Director for Advisory Services, noted, “The assistance of donors in structuring this transaction has been very beneficial. Support has been received from the Netherlands, Norway, and Sweden, as well as DevCo, a multidonor program supported by the UK's Department for International Development.”
“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,” remarked Christine Wallich, World Bank Country Director for Bangladesh. “Establishing 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.”
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
.
IFC’s Advisory Services Department (
www.ifc.org/advisory
) provides advisory assistance, primarily to governments, on private sector participation in the provision of infrastructure services. The services help establish public-private partnerships through which governments can bridge the need for increased services despite budget constraints and with the benefits of private sector expertise, management, and finance.
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