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Budget FY21: Power, energy sector receives Tk26,758 crore

  • Published at 06:28 pm June 11th, 2020
web-power plant
File photo of a power plant Syed Zakir Hossain/ Dhaka Tribune

Govt implementing mega plan to generate 60,000 MW by 2041

The power and energy sector of Bangladesh is set to receive an allocation of Tk26,758 crore in the proposed national budget for the 2020-21 fiscal year, placed in parliament by Finance Minister AHM Mustafa Kamal.  

The allocation was reduced by Tk1,293 crore in the coming fiscal as the sector had received allocation of Tk28,051 crore in outgoing fiscal of 2019-20.

The Power Division received Tk24,853.30 crore while the Energy and Mineral Resources Division got Tk1,905.29 crore, reports UNB.

Announcing the allocation on Thursday, the finance minister said the government with its firm commitment to ensure uninterrupted and quality power supply in the Mujib Centenary, together with “Sheikh Hasina’s commitment to extend electricity to all households”, has been relentless in facilitating a coordinated development in power generation, transmission and distribution.

As part of the Mega Plan to generate 60,000 MW by 2041, he said, the government has already been able to enhance the electricity generation capacity to 24,000 MW including captive and renewable energy, extend the electricity facility to 96% of our population, and raise the per capita electricity generation to 510 kilowatt-hour.

Currently, 48 power plants with a combined generation capacity of 16,875 MW are under construction, and the signing of agreements for construction of 12 power plants with a generation capacity of 2,785 MW are under process.

Further, the tendering processes for 6 power plants with a generation capacity of 650 MW is underway, he said, adding: “We have also taken up plans to construct 16 more power plants with a generation capacity of 19,100 MW in the near future.”

Identifying Payra, Maheskhali, and Matarbari as Power Hubs, Mustafa Kamal said the government has been implementing a number of mega projects in the power sector.

He said the government is currently importing 1,160 MW electricity from neighbouring India as part of energy connectivity under regional and sub-regional cooperation.

An MOU has been signed with Nepal for bilateral energy trade, and negotiation has been finalised to import 500 MW of electricity from an IPP (independent power producer), he added.

Signing of a tri-partite MoU with Bhutan to import hydroelectricity via India is at its final stage. Negotiations to import hydroelectricity from Myanmar and North-east India are in progress, he said.

The Finance Minister said the government has been laying emphasis on solar energy-based electricity targeting to enhance the contribution of renewable energy to 10% of total power generation.

“We have so far been able to generate 628 MW of power from renewable energy, and power plants of a combined generation capacity of 1,221 MW are either under construction or in the planning process.”

Following the all-out efforts of our government, the total transmission lines have now increased to 11,119 circuit km and the distribution lines to 560,000 km.

In addition, he said the government is moving ahead with the agenda of bringing all upazilas of the country under electricity coverage by December 2020. The Prime Minister has already inaugurated the full electrification of 257 upazilas, and the same programme for another 153 upazilas awaits inauguration, he said.

About the energy sector’s budget allocation, Mustafa Kamal said short, medium, and long-term exploration plans have been taken in both land and sea areas to increase the gas production.

As a result, the gas production capacity in the country has now risen to about 2,522 million cubic feet (mmcf).

To meet the rising demand for gas, he said BAPEX has already completed the drilling of 29 wells as part of its plan to drill 108 wells by 2021.

After gaining the new maritime boundary, the finance minister said Bangladesh has framed the Onshore Model PSC 2019 and the Offshore Model PSC 2019 to start new rounds of bidding for blocks in onshore and offshore areas in the country.

To prevent wastage of gas, improve energy efficiency, and reduce monitoring costs by installing pre-paid gas meters, 260,000 pre-paid meters have been installed in Dhaka city and Chittagong region.

As the supply from domestic natural gas is unable to meet the ever-increasing demand for energy, he said two Floating Storage and Regasification Unit (FSRU) with a daily capacity of 1,000 million cubic feet have been installed at Maheskhali.

The FSRU currently adds around 560 million cubic feet LNG daily to the national grid.

Further, to install a Land-based LNG Terminal at Matarbari with a 1,000 million cubic feet capacity, activities such as the Feasibility Study and the Terminal Developer Selection are currently in progress, he said.