The power sector of Bangladesh is at a crossroads between tough challenges and great opportunities. The government's aim to generate triple-plus current installed power capacity is part of its many ambitions. Requiring US $55bn to reach 38,700 MW of energy will provide opportune investors to enjoy steady returns for the coming 15-20 years.
The targeted energy production will mostly be attempted from coal sources as the natural gas option is swiftly being exhausted. The 2010 Master Plan was dependent on coal amounting to 19,6500 MW, but are investing recently on imported coal for power plant setup. Projects upto 500 MW can be managed locally, but larger ones of around 1300 MW needs foreign sponsorship.
The Power sector has been enjoying very consistent stability. It has been utilizing Ultra Supercritical Technology which ensures lower emissions. There are few risks bourne by investors, the international commodity fluctuations usually absorbed by the government. Default risks are minimum-to-none as BPDB has always cleared its dues. thus investors have been actively participating in this structured sector of the country.
Incentives are not afar either. 15 years tax holiday, no existence of customs duties or surcharges on plant and equipment, repatriation of equity along with dividends, along with foreign tax exemptions and repatriation on royalties, technical know how and technical assistance fees.
However, challenges remain, mostly in power transmission network and the renewable energy sector. Both have been trudging along, enormous networks of cable without power and only 175 MW of renewables realized out of the targeted 3,000 MW.
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