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Bangladesh
>> Regional Overview >> Bangladesh Overview Program Data Sheet
388-007
USAID MISSION: Bangladesh
Summary: USAID’s program to improve performance of key institutions in the energy sector, funded by DA and ESF resources, includes—
PROGRAM TITLE: Bilateral Energy (Pillar: Economic Growth, Agriculture, and Trade)
STRATEGIC OBJECTIVE AND NUMBER: Improved Performance of the Energy Sector, 388-007
STATUS: Continuing
PLANNED FY 2002 OBLIGATION AND FUNDING SOURCE: $4,770,000 DA; $1,500,000 ESF
PROPOSED FY 2003 OBLIGATION AND FUNDING SOURCE: $5,470,000 DA; $1,500,000 ESF
INITIAL OBLIGATION: FY 2000 ESTIMATED COMPLETION DATE: FY 2006
- technical assistance to increase institutional capacity through reforms in the gas and power sectors;
- technical support to create an improved enabling environment to help attract foreign investment; and
- technical assistance and training to improve rural power sector performance to help alleviate poverty in rural areas.
Beneficiaries include rural villages without access to electricity and nation-wide energy consumers who will benefit from access to more reliable power and rationalized pricing in a more competitive power market. Ultimately, energy sector reform will contribute to overall to economic growth.
Inputs, Outputs, and Activities: FY 2002 Program: USAID will support technical assistance to restructure and reform the inefficient, state-dominated Bangladesh power and gas sector. This support will build financial, management and regulatory capacity in restructured power and gas sector entities. In the gas sector, USAID will help create a regulatory model, develop internal guidelines for the operation of gas entities, conduct a commercial needs survey and an environmental standards needs survey, and provide capacity-building assistance in Production Sharing Contracts implementation. In the power sector, USAID assistance will promote continued "unbundling" and separation of policy, regulatory and commercial functions; improved performance of distribution companies; and assistance to the government in anticipating the social impacts of market reforms. Under the multi-year training program, selected courses to build skills and capacity and to help implement regulatory reform will be provided to professionals in the power and gas sectors.
Technical assistance to the rural power sector will consolidate the successes of Bangladesh’s Rural Power for Poverty Reduction Project that continues to bring electricity to remote areas through rural power distribution cooperatives. A second two-year Participating Agency Services Agreement with the Department of Energy will provide technical support to examine policy options that will further develop the energy sector. ESF resources will be used to support specific energy sector privatization and deregulation initiatives.
Planned FY 2003 Program: USAID plans to use FY 2003 funds for further implementation of the gas and power sector reform assistance provided by the Department of Energy and to implement the final stage of the rural electrification program. A key component would be assistance to establish a regulatory body and ESF support to respond to opportunities to advance restructuring and privatization as the government’s reform program proceeds. Special efforts are anticipated to assist the government to address natural gas export issues should it elect to permit such exports. USAID intends to build institutional management capacity and strengthen efficient systems operation to ensure sustainability in rural electrification. In addition, USAID expects to offer support for any serious efforts to encourage the use of environmentally friendly, compressed natural gas in the transportation sector.
SUBMISSION OF THIS PROGRAM DATA SHEET CONSTITUTES FORMAL RENOTIFICATION OF USAID’S INTENT TO OBLIGATE FY 2002 RESOURCES FOR THE ACTIVITIES DESCRIBED ABOVE. Performance and Results: Results in power sector unbundling far exceeded expectations, with 1251.5 kilometers of transmission line transferred to the newly established Power Grid Company. Further restructuring of the power sector through the transfer of transmission and
distribution assets to the respective utilities will help move the power sector away from its existing, inefficient, vertically integrated structure. USAID’s efforts to improve the enabling environment have seen some progress in the proposed natural gas and power sector legislation. Passage of the new law, which will set the stage for necessary institutional reforms, is expected in 2003. The FY 2001 United States Geological Survey (USGS) study of Bangladesh’s undiscovered natural gas resources provided impetus for the new Bangladesh government to further consider export of its abundant natural gas reserves.
A joint USGS-Petrobangla study of undiscovered natural gas estimates that Bangladesh possesses 32.1 trillion cubic feet of unexploited reserves. Assistance in rural electrification has further strengthened the capacity of the Rural Electrification Board and the rural power co-operatives. The number of electrical connections in rural areas has increased significantly, and the total number of legal power connections is expected to increase from 5.3 million in FY 2001 to 5.6 million in FY 2002, and again to 6.7 million by FY 2006.
USAID support for energy sector reform through FY 2006 will result in increased power generation and substantial progress in system loss and collection rates. Institutions in both the gas and power sectors will be strengthened and the new regulatory body will be in place.
Principal Contractors, Grantees, and Agencies: USAID activities are carried out through the National Rural Electric Cooperative Association (prime) and PA Government Services Inc. (prime) with its subcontractor, the Institute of International Education. The Participating Agency Service Agreement with U.S. Department of Energy provides access to the U.S. Geological Survey and the Mineral and Mining Service of the U.S. Department of Interior.
US Financing in Thousands of Dollars
388-007 Improved Performance of the Energy Sector DA ESF Through September 30, 2000 Obligations 9,757 0 Expenditures 2,440 0 Unliquidated 7,317 0 Fiscal Year 2001 Obligations 2,500 0 Expenditures 3,249 0 Through September 30, 2001 Obligations 12,257 0 Expenditures 5,689 0 Unliquidated 6,568 0 Prior Year Unobligated Funds Obligations 0 0 Planned Fiscal Year 2002 NOA Obligations 4,770 1,500 Total Planned Fiscal Year 2002 Obligations 4,770 1,500 Proposed Fiscal Year 2003 NOA Obligations 5,470 1,500 Future Obligations 14,508 0 Est. Total Cost 37,005 3,000
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Last Updated on: May 29, 2002 |
