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Infrastructure & PPPs in Bangladesh, Nepal and Sri Lanka - Q2 2023 Update

YOG INFRA Q2 2023 insights

BANGLADESH sees a higher allocation of federal budgets for infrastructure development, and has bought changes to PPP Authority in the last quarter. While the term "independent" has been removed from existing law governing PPP Authority, an alignment with the government may help to deliver PPP projects faster - the impact remains to be seen. Both NEPAL and SRI LANKA have also planned a few PPP projects, albiet at a much slower pace.

Read more about key developments in Infrastructure and PPPs in the three countries in our insight.

 

Bangladesh

INFRA AND CLIMATE FINANCE IN FOCUS IN BANGLADESH BUDGET

Bangladesh, in June 2023, has increased budgetary allocations for power, energy, transportation and communications, and the government is preparing a climate change plan that will facilitate access to international financing. Presenting the federal budget for the year through June 2024, Finance Ministry increased allocations to power and energy by 33.5% to BDT 348.2 Bn (USD 3.25 Bn) from the previous year’s BDT 260.66 Bn (USD 2.4 Bn). Similarly, an increase of 7.5% in funding for infrastructure and communications to BDT 876 Bn (USD 8.1 Bn) from BDT 815 Bn (USD 7.5 Bn).

The finance ministry has stated a goal to double the country’s power transmission network to 28,000 ckm by 2030 from the existing 14,644 ckm. This will be required to cater to Bangladesh’s aim to have an installed power generation capacity of 40 GW by 2030, and 60 GW by 2041. Further 33 power plants with a total capacity of 12 GW are under construction through public-private partnerships. The administration has also planned to set up 34 more plants of a combined capacity of 10.4 GW.


BANGLADESH PROPOSED BILL SEEKING CHANGES IN PPP AUTHORITY

The Bangladesh government proposed a bill in the parliament in April 2023 to make alterations in the Public-Private Partnership (PPP) Authority. The Bangladesh Public-Private Partnership (PPP) (Amendment) Bill, 2023, seeks to permit the vice-chairperson to chair any meeting in the absence of the chairperson of the PPP authority, with at least two meetings to be held every year.

The amendment also proposes to replace the board of governors and make the government the appointing body of the PPP Authority. Accordingly, the word – independent – has been dropped from the existing law, which states the PPP Authority will be impartial and independent while performing its duties.


EXPERTS STRESS PPP INITIATIVE TO BUILD DISASTER RESILIENT SMART BANGLADESH

Experts underscored the need for Public-Private-Partnership (PPP), encouraging private investment in disaster-resilient infrastructure, promoting technology usage, and creating awareness, and collaboration among stakeholders. Bangladesh is now vulnerable due to both natural and man-made disasters. There are a lot of industrial factories in the country which at risk due to violating building codes and poor structure.


JFE ENGINEERING SEEKS BANGLADESH PARTNER FOR W2E PROJECT

JFE Engineering Corporation, an arm of Tokyo-headquartered JFE Group, is looking for a local partner in Bangladesh for a waste-to-energy project in Chattogram city. The Japanese conglomerate plans to build a plant with a daily capability to process 1,000 tonnes of waste and a gross power generation capacity of 15 MW. It will also build compost and recycling plants.

Chattogram has two landfills – one at Arefin Nagar, which can be used for another 5 months, and another at Halishahr, which can be used for another 14 months, after which they will spill over. The city generates about 2,100 tonnes of waste daily.

JFE Engineering aims to set up a special project company with a local partner to implement the project. The waste-to-energy plant will sell the electricity it generates to the Bangladesh Power Development Board under a long-term power purchase agreement.


Nepal

NEPAL TO ENCOURAGE PPPs IN TOURISM INFRA

The government is planning to improve infrastructure in the tourism and travel sector to attract foreign investment. Nepal Tourism Board emphasized the need for facilitating public-private partnerships to help revive the sector from the effects of the COVID-19 pandemic. Tourism serves as a vital driver of Nepal's economy, fostering economic growth and generating employment opportunities. Nepal possesses an abundance of tangible and intangible treasures, encompassing rich cultural heritage, stunning art and architecture, pilgrimage sites, yoga and meditation retreats, holistic wellness centres and much more.


INDIA’S NHPC TO DEVELOP HYDROPOWER PROJECT IN NEPAL

NHPC Limited (A Govt. of India Enterprise) and Vidhyut Utpadan Company Limited (VUCL), Nepal signed an MoU (Memorandum of Understanding) in June 2023 for development of Phukot Karnali Hydro Electric Project 480 MW in Nepal. The project will use the flow from the Karnali River for power generation and the generated power will be fed into integrated power system of Nepal.

The installed capacity of the project shall be 480 MW with an average annual generation of about 2448 GWh. The key features of the project are a 109-metre-high dam and an underground powerhouse where 06 turbines of 79 MW each shall be housed. Additionally, to utilize minimum environmental release one Surface Powerhouse of 6 MW capacity i.e., 2 machines of 3 MW each is also planned. This project is conceived as a Peaking Run-of-River (PRoR) type scheme.


Sri Lanka

COLOMBO PORT PLANS USD 392 MN LOGISTICS CENTRE PPP

The Sri Lanka Ports Authority and China Merchants Port Holdings Company will jointly construct a USD 392 Mn commercial and logistics hub in the South Asian country. The project is to be built at the Colombo Port, will be implemented in a public-private partnership (PPP) arrangement with a concession period of 50 years. Construction of the 8-floor, 92 m-high facility will start soon, and it is expected to be completed in 2 years. The PPP will be a joint venture between China Merchants Port (70%), the Sri Lanka Ports Authority (15%), and Access Engineering (15%).

The project aligns with Sri Lanka’s national development strategy to transform the country into a major logistics center, identified as a key sector and a driving force for economic development in the National Policy Framework (NPF) 2019.

 

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With our offices in Singapore, India and UAE we work on projects globally, and the team brings strong experience in supporting development of infrastructure projects.


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