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Tk100cr Gas Development Fund to be used in renewal energy projects

  • Published at 12:45 am July 12th, 2017
Tk100cr Gas Development Fund to be used in renewal energy projects
The Ministry of Finance has approved the plan to use Tk100 crore from the Gas Development Fund for renewable energy projects, said officials. To ensure transparency and accountability in the use of the fund, the ministry has asked the Energy Division to prepare legislation related to gas, petroleum and minerals development funds. A board was already formed to regulate gas development fund and projects. The fund was formed in 2009 with the extra money collected from consumers through a gas price hike of 10-15% imposed by the Bangladesh Energy Regulatory Commission. According to the Energy Ministry proposal, the money was collected from an additional 55% value-added tax and supplementary duties on gas prices. Finance Minister AMA Muhith last week approved the Energy Division’s proposal to divert money from the Gas Development Fund, which currently stands at Tk4,208.38 crore. Earlier, Power and Energy Minister Nusrul Hamid had sent the proposal which suggested use of the fund for different development projects. The total number of projects under the fund is 29 while 18 development projects under the Energy Division were already completed. Another five projects will be taken under the fund and the total cost is estimated at Tk1,280.88 crore. Energy sector expert Professor MD Nurul Islam said the government is now “moving in the wrong direction” in its use of the gas fund, which was created to enhance the capacity of exploration and production companies. “This is a separate fund for the energy sector from the regular budgetary allocation. We wanted to strengthen the Bapex by creating the fund, so that gas exploration would run on full swing,” Nurul Islam said. “The fund was supposed to be given to Bapex as a grant instead of giving loan. Moreover, now other conditions are being applied so the aim of Bapex will not be fulfilled,” he added.