Major Achievements
The Government of Bangladesh has given its highest priority to the power sector considering its importance to the overall development of the country. The Government has set a vision to provide electricity for all people by 2020. A number of reform measures have been undertaken to encourage private and joint venture investments for this capital-intensive sector, as well as ensuring transparency, accountability and competition. Utilities have become more active in order to improve their performance and significant progress has been achieved in this sector. However, due to inadequate generation capacity the country has faced severe load shedding over the past two years.

The Power System Master Plan update, which covers to the year 2025, was finalized in 2005. A short-, medium- and long-term development plan has been prepared. This Plan also aims to assist in mitigating environmental impacts from the power sector.

Development Activities
During the 2003 to 2005 financial years, electricity generation has increased and new transmission and distribution lines have been constructed. In this period total number of consumers has increased to about 2.51 million. In addition, about 8.5 thousands new villages have been electrified. These achievements have positively impacted the development of Bangladesh’s agro-based economy. Electricity sales have increased by 30 per cent, amounting to 3770 million units. System losses have come down from 27 per cent to 23 per cent and the maximum demand served has increased by 618 MW. As a result, the utilities have improved financially.

Major Challenges
Though demand for electricity is increasing daily, the construction of new power plants and maintenance work is limited due to financial constraints. As a result, the country is facing challenges such as power shortages, system losses and load shedding.

Power Sector Reforms
Power sector reforms started in 1977 through the creation of the Rural Electrification Board (REB) to augment the Rural Electrification Program. As a continuation of the reform, the Dhaka Electric Supply Authority was created in 1991 and the Industrial Policy was amended in 1992 to allow private sector participation in the power sector. In 1995, the Government approved the “National Energy Policy” which recommended unbundling the power sector and establishing an “Energy Regulatory Commission”. This Commission has started functioning in a limited way.

The Government has undertaken some reform programmes in consistent with the approved policy to enhance the overall efficiency and attract private capital to this sector. As a part of these programmes, the following activities have been achieved:

Generation

• The “Private Sector Power Generation Policy of Bangladesh” was approved in 1996 to generate and sell power in the private sector.
• The Government has approved the “Vision Statement & Policy Statement on Power Sector Reform” highlighting a planned and integrated approach which reflects the Government’s commitment to reforms and restructuring.
• The Government has approved the “Policy Guidelines for Small Power Plants (SPP) in Private Sector” to develop power plants.
• BPDB’s second largest power station “Ashugonj Power Station” has been converted to “Ashugonj Power Station Company Limited (APSCL)”.
• The Electricity Generation Company of Bangladesh (EGCB) has been created to manage the existing Siddirganj power plants and planned Siddirganj power plants including the Siddirganj gas turbines and a 360 MW power plant at Haripur.
• The Haripur 100 MW power station and the Baghabari 170 MW power station are running as a Strategic Business Unit (SBU) to improve performance.

Transmission and distribution

• The Power Grid Company of Bangladesh Limited (PGCB) has been established under BPDB’s ownership, and has already taken over 100 per cent of the transmission and other assets.
• The Dhaka Electric Supply Company Limited was established under the Dhaka Electric Supply Authority (DESA).
• Steps have been taken to electrify remote areas of the country through the “Remote Area Power Supply System”. A development service agreement has been signed with the “Infrastructure Investment Facilitation Center” to conduct a feasibility study. This programme will be implemented by the private sector.
• Strategic business unit activities have been adopted in 47 distribution divisions under the BPDB and DESA. Due to implementation of the strategic business unit programme, system losses have been reduced and revenue collection has been increased considerably.
• The “West Zone Power Distribution Company” was established in 2003.
• Programmes have been undertaken to introduce pre-paid metering systems in several areas to improve revenue collection. The results of prepaid metering implemented in one 11 KV feeder in Sylhet has been positive.

Renewable Energy
The government has prepared a draft Renewable Energy Policy and is seriously considering electricity generation from all possible sources of renewable energy such as wind, solar, biomass, biogas, mini-hydro, and solid waste.

Steps have been taken to produce electricity from solid waste of the Dhaka Municipality Corporation. A foreign consultant has been engaged under financial assistance of the Commonwealth to design a power station, conduct a feasibility study, prepare a draft security package document and assist in selecting a sponsor.

Stand Alone Rural Electrification
Under the Rural Electrification Program by the Rural Electrification Board (REB), 2,200 residential homes and small commercial shops in remote areas will receive solar home systems. BPDB has also installed a 4x225 KW windmill in Feni and commissioned 50 kW mini-hydro plants in Barchal.

The Government of Bangladesh envisions reliable, high quality and affordable electricity to 100 per cent of the population by 2020. Installation of a number of generation units is in progress.

The BPDB has already started its efforts in developing renewable energy and implementing energy efficiency measures. Under the Hill Tracts electrification project 390 solar panels have already been installed. In addition, 400 more solar panels are being installed.

Load Management and Demand Side Management
Keeping generation availability at the highest level on the supply side and managing unproductive demand of end users is the best practice to limit load shedding in Bangladesh.  In this regard the following steps have been taken:

• A media campaign has been established encouraging a shift in the load from irrigation to off-peak hours. In the last few years it is estimated that 200 MW of irrigation load was shifted from peak hours to off-peak hours.
• Motivational programs have been undertaken to enhance consumer awareness of the need to conserve electricity during peak hours.
• Compact fluorescent lamps are being used in offices and commercial shops and a motivational campaign is on-going to encourage their utilization.
• Industries operating two shifts have been requested not to operate during peak hours.
• Industries and large commercial customers like shopping malls are being requested to use their own captive generation.

Environmental management
Power plants proposed by the BPDB are required to comply with Laws, Rules and Regulations pertinent to environment. The Department of Environment (DOE) of the Government of Bangladesh is responsible for ensuring application of Laws and issues the necessary clearance in industrial and development activities. Some laws regarding the environment that are applicable to power projects are:

• Bangladesh Wild Life Preservation Act 1973(Amended in 1974)
• Forest Policy ( 1994)
• Power Policy 1995
• Energy Policy 1996
• Industrial Policy 1999
• Electricity act 1910
• Mineral Gas Safety rules 1991
• Petroleum Policy 1993

Stakeholders 
Bangladesh Power Development Board
Ministry of Power, Energy & Mineral Resources
Power Grid Company of Bangladesh
Rural Electrification Board
West Zone Power Distribution Co. Ltd.
BPDB            
Power Cell     
PGCB           
DESA      
DESCO      
REB             
WZPDCL      
LGED          

(1) All information was provided in a survey submitted to ESCAP in February 2007 by Md. Delwar Hossain, Director, System Planning, Bangladesh Power Development Board.