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BERC to amend power development fund guidelines

  • Published at 12:41 am May 5th, 2017
BERC to amend power development fund guidelines
Bangladesh Energy Regulatory Commission (BERC) has decided to put more emphasis on financing coal-fuelled power plants in its proposed amendment to the guidelines for the utilisation of Electricity Maintenance and Development Fund (EMDF) of Bangladesh Power Development Board (PDB). BERC Chairman Monowar Islam made the announcement on Thursday during a workshop on the amendment proposal in Dhaka. He requested the stakeholders to share their opinion on the draft guidelines as soon as possible so the commission can finalise it. The proposal also suggests changing the name of the fund to Power Sector Development Fund. The EMDF was created to increase the PDB's capacity in low-cost power generation as well as to ensure proper maintenance of power plants around the country to reduce overall power supply cost. In effect since February 1, 2011, it is a rolling fund where 5.17% of the revenue from the bulk power tariff is contributed. Till date, the fund is worth about Tk5,600 crore, from which PDB has received Tk4,200 crore and state-owned company North-West Power Generation Company Ltd has received Tk1,200 crore for projects. The proposed amendment adds a nominal service charge of 1% to the fund and includes projects of other government-owned power generation companies besides the PDB for financing. It identifies PDB maintenance, efficiency improvement and replacement projects, tying solar and wind power projects to the national grid and coal-based power projects under the master plan for power sector as investment areas. It also recommends the loan period to be 15 years with a five-year grace period. According to the proposed amendment, 50% of the fund should be allocated for coal-based power plant projects, 40% should be spent on PDB's maintenance and efficiency for power plant projects, and the rest on grid-tied solar and wind power-based projects. A six-member committee comprising high officials, headed by the secretary of Power Division will prioritise and select economically feasible and critical projects for EMDF funding by examining feasibility study development project proposals and other relevant document, the proposed guidelines say. The committee will also be responsible for sending prioritised project list to the BERC.