Govt urges banks to provide Tk 20,000cr for power projects
The government has urged banks to channel Tk 20,000 crore into the power sector over the next six months to fast-track quick rental power plant projects.
The request was made at a meeting on June 21 between the power division and top executives of banks.
"Banks are sitting on huge excess liquidity and the power sector is a big opportunity for them to invest in," said Nasrul Hamid, state minister for the ministry of power, energy and mineral resources.
At present, the banking sector has excess liquidity of about Tk 100,000 crore, according to data from the central bank.
Besides, investment in private sector power plants is secured as all the projects have purchasing agreements with the government.
"That is like government guarantee against the loans," he said, adding that the returns from power sector investment will be higher than other sectors.
Several managing directors and chief executive officers of banks have acknowledged the request from the power division.
Banks will oblige to the request of the power division as the country needs to address the electricity shortage, said Ishtiaque Ahmed Chowdhury, managing director of Trust Bank.
"There was no pressure from the government," said Ataur Rahman Prodhan, managing director of Rupali Bank, adding that banks can easily arrange the funds for the fast-track projects as they have excess liquidity.
If the projects are viable it will be a good investment opportunity for banks, he added.
"The power sector already has our attention," said Mohammed Nurul Amin, managing director of Meghna Bank.
The meeting was just to motivate banks to direct funds to the power sector, said MA Halim Chowdhury, managing director of Pubali Bank, adding that it is not mandatory for banks to do so.
The government is also planning to issue a bond for the power sector, according to Hamid, the state
Some 15 power plants with a total generation capacity of 2,000 megawatts will be established by January next year to address power shortage.
At present, Bangladesh's installed electricity generation capacity is 15,379 megawatts, according to the Bangladesh Power Development Board. Actual generation averages 7,500MW per day.