Government may review banking law to fund power projects

Staff Correspondent

2 January, 2018 12:00 AM printer

The government is likely to review Bank Company Act 1991 aims to generate fund for implementing series of power projects having capacity to produce 60,000mw of electricity by 2040.

The Ministry of Power, Energy and Mineral Resources called for an inter-ministerial meeting at Biddut Bhaban on January 4, 2018 to discuss the issue in details.

Prime Minister’s Power and Energy Adviser Dr Tawfiq-e-Elahi Chowdhury, State Minister for Power and Energy Nasrul Hamid, senior officials of power division and managing directors of banks will attend the meeting.   

According to sources, the government will require around US$32 billion to implement the power projects by 2041.  

Earlier, a high powered committee suggested the government to extend the time limit to a 9-month period for using Islamic bond in power sector with a view to injecting more funds for generating 60,000MW electricity by 2040.

The power division formed a high power committee, led by an additional secretary of finance division, to review the proposal. The committee has recently given its consent to extend the time period from six months to nine months to facilitate investment in power sector.

The power division now plans to utilize the fund amounting to Tk 4,044 crore, generated from Islamic bond, for development of power generation and upgrading transmission and distribution systems. Till July, 2017, the amount of money under the fund stood at Tk 8,814 crore.

Of the amount, the government has already invested Tk 4,770 crore. The power division will utilize the rest amount of Tk 4,044 crore. The Power Division requested the Internal Resources Division (IRD) for review of the Public Debt Act 1994 to facilitate long term use of the fund for power generation.

The government, sources said, also needs to amend the 26 Kha (2, 3) subsections under the company act to avail the facilities. In August, 2014, the Internal Resources Division (IRD) under the Ministry of Finance had issued a policy guideline for using Islamic bond under The Public Debt Act 1994. The Public Debt Act allows using the fund for 90-180 days in case of funding power generation.

According to the act the fund can be used in any public welfare activities and can be invest in power generation.  As the power sector requires long term investment, the concerned division urged the finance ministry to extend the time limit to nine months to help facilitate more power generation.