1. Electricity Reforms in Bangladesh
Taifur Rahman

2. Introduction Goals 2020: A long way to go
Providing access to affordable and reliable electricity to all citizens
A long way to go
Electricity coverage – 43%
Per capita electricity consumption – 165 kWh
One of the lowest in the world.
Pace of power sector development to be accelerated.

3. Reforms Overview Reforms starting in 1977
Rural Electrification Board (REB) created
70 large cooperatives (PBSs) established
Electricity Supplied to 7 million consumers out of country’s 9.7 million consumers in 2006.
Significant positive impact on poverty reduction and social benefits to the rural people
Unbundling starting in early 1991
Creation of Dhaka Electricity Supply Authority (DESA)
Didn’t perform well.

4. Reforms Overview (cont.)
High power Inter-ministerial Committee on “Power Sector Reform in Bangladesh” (PSRB) constituted in 1993 recommending
Unbundling of the sector according to functional lines
Corporatization of sector entities
Establishment of an independent Regulatory Commission.

5. Reforms Overview (cont.)
Power Cell created under the Energy Ministry in 1995
To drive power sector reforms and to promote private power development
Two companies created in 1996
Power Grid Company of Bangladesh Limited (PGCB)
Dhaka Electric Supply Company Limited (DESCO).

6. Reforms Overview (cont.)
The National Energy Policy adopted in 1996
Sector unbundling
Private sector participation
Establishment of an Energy Regulatory Commission
“Private Sector Power Generation Policy of Bangladesh” was adopted in 1996
“Policy Guidelines for Small Power Plants (SPP) in Private Sector” approved in 1998.

7. Reforms Overview (cont.)
Vision Statement and Policy Statement on Power Sector Reforms in June 2000
Corporatization of Ashugonj Power Station in 2002
Energy Regulatory Commission Act 2003
Creation of West Zone Power Distribution Company (WZPDC) in 2003
Establishment of Electricity Generation Company of Bangladesh (EGCB) in 2003.

8. Reforms Overview (cont.)
Bangladesh Energy Regulatory Commission (BERC) starting in 2004
Approval to convert BPDB into a Holding Company in January 2004
New company “Dhaka Power Distribution Company Limited (DPDC)” incorporated in 2006
Policy guideline for power purchase from Captive Power Plants (CPPs) prepared in 2006.

9. Current Structure Ministry of Energy and Mineral Resources
Energy and Mineral Resources Division
BERC
Power Division
Power Cell
CEI
BPDB
PGCB
REB
DESA
DESCO
IPP
IPP

10. Power Sector Scenario Total generation capacity (June 2007):
Total – 5,269 MW
BPDB (government) – 3,872 MW
IPPs (private) – 1,397 MW
Modes:
Hydro MW
Steam MW
Gas Turbine MW
Combined Cycle MW
Diesel MW
Per capita generation – 165 kWh.

11. Power Sector Scenario (cont.)
New addition
2004
2007
2012
2020

12. Power Sector Scenario (cont.)
Consumer base:
Total consumers – million
Domestic %
Industrial (small) %
Commercial (small) %
Large Industrial and Commercial %
Agriculture %
Others %
DESA %
REB %
DESCO %
WZPDCL %.

13. Power Sector Scenario (cont.)
Target

14. Regulation of Power Sector
Bangladesh Energy Regulatory Commission (BERC)
Act passed in 2003
Establishment of as independent and impartial regulatory commission to regulate energy sector.
Started functioning in April 2004
Objectives:
To frame rules and regulation to ensure transparency in the management, operation and tariff determination in electricity, gas and petroleum sector.
To protect consumer and industry interest and promote competitive market.

15. Regulation of Power Sector (cont.)
Major functions of BERC:
Issue, cancel, amend and determine conditions of licensees
Determine tariff safety enhancement
Frame codes and standards and make enforcement of those to ensuring quality of service
Resolve dispute between licensees and and consumer and refer those to arbitration if necessary.
Advise the Government regarding electricity generation, transmission, marketing, supply distribution and storage of energy.

16. Regulation of Power Sector (cont.)
Autonomy and accountability of BERC
Has been questionable so far
Lot of expectation from the new leadership
Public participation
Public hearing
Effectiveness questioned
Expected to be more effective under new leadership
No major regulatory decision so far.

17. Conclusion
New 3-year Road Map for Power Sector Reform ( ) announced last year
To create an institutional foundation on which to ramp, in a sustainable manner, the substantial investments needed for the sector to properly support economic growth and reduce poverty.
Main outcome expected:
Further unbundling of electricity supply into an economically viable number of separate generation and distribution companies, and a single transmission company
Good luck for the Road Map.