When we explore the fact of our infrustructure weekness ,we clearly find that electricity problem is the vital. So this is the first issue for Development.

Bangladesh plans to set up a fund that will invest as much as $10 billion in energy and power projects within the next decade to resolve an electricity shortage, a senior official said.

The 11-month-old government also is seeking to attract about $4 billion of investments in power plants and a liquefied- natural-gas import terminal, and will meet potential investors in London, New York and Singapore in December, said Tawfiq-e-Elahi Chowdhury, 64, energy adviser to Prime Minister Sheikh Hasina Wajed who also holds the post of energy minister.

“The potential demand for electricity is maybe twice as much as we are producing now,” Chowdhury said in an interview in Dhaka yesterday. “It’s not just trying to meet today’s gap; it’s trying to stay ahead of the curve, which is going to be very difficult.”

Hasina has vowed to resolve an electricity crisis that has plagued the south Asian nation with a history of military coups since independence from Pakistan in 1971, by engaging the private sector and helming the energy and power ministry. The government needs to address its “acute power shortages” to attract more investments from abroad, the Asian Development Bank said in its 2009 report on the country.

The government has faced a “twin problem” of a shortage in the supply of natural gas, its primary fuel for power, and generation capacity since it came to power in January, Chowdhury said. Former Prime Minister Khaleda Zia did “very little exploration” when she was in power from 1996 to 2001, he added.

The nation of 162 million people, whose economy is half the size of Singapore, aims to add another 5,000 megawatts of daily power generation capacity in the next five years, Chowdhury said.

Demand exceeds the current capacity by about 1,000 megawatts at the “peak hour,” excluding “a lot of areas” in Bangladesh which don’t have access to electricity, he said.

Attracting Investors

The economy grew 5.9 percent in the year to June, faster than any southeast Asian nation and almost on par with India’s 6 percent expansion. It will grow 5.2 percent in the year to June 2010, the ADB said.

The government plans to set up the energy and power fund in the middle of next year, Chowdhury said.

“I’m hoping that in five to 10 years it will be a $10 billion fund,” said Chowdhury, who obtained a Ph.D. in economics and population from Harvard University in 1983.

The fund will invest in the equity and debt of coal, oil and gas companies as well as power projects along with companies, he said. The government is still working on the structure of the fund, including how it will be securitized and whether it will be traded, he said.

It is seeking to attract non-resident Bangladeshis, who send about $7 billion of remittances each year, as well as banks and insurance firms to invest in the fund, Chowdhury said. The returns will be “competitive,” he said.

Energy Saving

The government wants to attract foreign companies and investors, through the planned meetings in December, to build 2,000 megawatt coal-fired power plants and smaller ones, he said.

The LNG import terminal it plans to build near Chittagong port, in southeastern Bangladesh, will cost about $1 billion, Chowdhury said. LNG is gas that is cooled to a liquid for transport by ship to markets not connected by pipelines. The fuel is received at import terminals and converted back to a gaseous form so it can be piped to users.

The government, which has started discussions to start a nuclear power plant, is also exploring prospects for renewable sources of power, including wind and solar energy as well as small hydroelectric projects, Chowdhury said.

It will distribute 15 million energy-saving bulbs to households for free in February, and another 16 million later, a move Chowdhury said would help free up about 300 megawatts to 400 megawatts of power capacity.

The nation introduced daylight saving in June, shifting the clock earlier by an hour, Chowdhury said in his office, where the air-conditioning was off and the windows opened.

Hasina’s political alliance was swept back to power in last December’s national elections that ended two years of military- backed emergency rule in the country. Hasina had been ousted in 2001.