Seminar on “Foreign Investment in Bangladesh: Opportunities and
Prospects” with special session on “Power Sector Development
A daylong seminar on “Foreign Investment in Banglasdesh : Opportunities
and Prospects” with special session on “Power Sector Development in
Bangladesh was organised by India-Bangladesh Chamber of Commerce &
Industry (IBCCI) and the High Commission of India in Bangladesh on 29th March,
2014 at Ruposhi Bangla Hotel. The seminar was divided into three segments; an
inaugural session; a session on investments in Bangladesh where companies
shared their experiences on investing in Bangladesh and Government Agencies
spoke on policies to promote Investments and a special session on power sector.
The seminar was well attended with over 120 people participating in all the three
sessions.
Inaugural Session
Dr. S. A. Samad, Executive Chairman, Board of Investment (BoI), was the
Guest of honour in the inaugural session. Mr. Pankaj Saran, High Commissioner,
Mr. Monowar Islam, Secretary Power, Government of Bangladesh, Mr.
Mohammad Ali, IBCCI President, and Mr. Abdul Matlub Ahmad, Special Adviser
also spoke.
Dr. S. A. Samad, Executive Chairman of BOI, making the keynote speech. Mr. Pankaj Saran, High Commissioner,
Monowar Islam, Power Secretary , Mohammad Ali, IBCCI President and Special Adviser Abdul Matlub Ahmad are
also seen
In his speech, the High Commissioner stressed the need for projecting
Bangladesh’s potentials in India with a view to attracting potential Indian
investors into the country. Bangladesh needs to bridge the information gap with
India to enhance cooperation between the businesses of the two countries.
Bangladesh he said has progressed significantly since 1990s, but many
Indians are not aware of this fact, Bangladesh should reach out to different parts
of India to project its achievements and the potential areas for new investments,
He also emphasised on establishing business-to-business contacts
between the two countries and that to this end the High Commission of India
have been issuing multiple entry business visas with durations ranging from one
to five years to Bangladeshi business persons in large numbers.
Dr. S. A. Samad Executive Chairman, BoI, said Bangladesh is painted
negatively in the world, including India, despite its tremendous economic
achievements in the last two decades. Bangladesh is a lucrative country for
foreign investments, the country has a huge workforce and consumer-base and
the rate of return is higher than many countries.
Session I
Mr. Aroop Chatterjee, General Manager, Asian Paint Ltd. said that the
growing real estate and infrastructure sector along with a large consumer base
made Bangladesh an attractive destination for Asian paints to invest in
Bangladesh. Asian Paints will need to commission a new plant in the next 3-4
years to cater to the growing demand. He urged for assistance to investors in
land acquisition and power and clarity on time lines for approvals once the
required paper work had been completed.
Mr Abrar A Anwar, Managing Director and head of wholesale banking,
Standard Chartered bank, in his presentation listed out the incentives offered by
the Bangladesh government for promoting FII and FDI including the EPZ policy.
He also identified thrust areas for investment in Bangladesh and said that not
many Indian blue-chip companies were present in Bangladesh presently.
Indians also hesitate to invest in Bangladesh that changes policies frequently by
issuing SROs (Statutory Regulatory Orders), he said.
In his presentation Mr. Rajarshi Banerjee, Country Manager & MD, ABB
highlighted policy issues affecting foreign investors in Bangladesh with particular
reference to:
1. Instrument of transaction for importation
2. Inability to import goods on usance (credit/deferred period) term
against Commercial IRC
3. Inability of service import
4. Regularising commission incomes received from oversea sister
organizations
5. Issuing credit card for foreign PI visa holder
6. Passing on duty benefit to local subsidiary of foreign suppliers
Terming his experience in Bangladesh as extremely positive, Mr Rajeev
Jain, CEO of CEAT Bangladesh said that his company was the largest Indian
investor in Bangladesh in the manufacturing sector. The company currently met
40% of the tyres for the Bangladesh market.
Public-Private Partnership (PPP) is picking up and presently, 34 projects
are in the pipeline for implementation, said Syed Afsor H Uddin, CEO of the
Public Private Partnership Office. He said that the government had placed strong
emphasis on the PPP model of investments in the sixth plan (FY 2011-16). He
also outlines the role played by the PPP office in approval of projects.
The Bangladesh bank representative in his presentation said total FDI in the first
six months of 2013(Jan-June) was UDS$ 933.09 Mn. He identified the major
sectors in the FDI flows in the same period as banking (US$ 238 Mn),
Textiles(US$ 237 Mn), Telecommunication(US$ 185 Mn), Power(US$ 41 Mn),
Chemicals and Pharmaceuticals(US$ 16.44 Mn). The UK led the counties in
investment in Bangladesh (US$104 Mn) during the same period followed by
Malaysia (US$ 97 Mn), Japan (US$ 79 Mn), Singapore (US$ 77 Mn), and South
Korea (US$ 51 Mn). India stood thirteenth in the list of foreign investors with US
26 Mn.
Nabhash Chandra Mandal, Executive Member, Board of Investment in his
presentation outlined the goal of becoming a Middle income country by 2021. He
cited several International agencies economic outlook for Bangladesh in the
medium and long term and the World Bank report on ease of doing business
where it stood at 74 in 2013. He listed the salient features of the National
Industrial Policy of Bangldesh-2010 and claimed it was the best investment policy
in South Asia. He also spelt out other policy initiatives to promote investment role
of BOI in investments, and Indian presence in Bangladesh.
Special session on power sector
Former Power Secretary, Govt. of India & World Bank Energy Adviser, R. V. Shahi making the keynote presentation
on Power Sector Development. Indian Deputy High Commissioner Sandeep Chakravorty, Power Secretary Monowar
Islam, Sr. Secretary PMO Abul Kalam Azad, Former Adviser to Caretaker Govt. M. Tamim & IBCCI Special Adviser
Abdul Matlub Ahmad are also seen
Mr. R.V. Shahi, Former Indian Power Secretary and Energy Adviser to the
World Bank, while presenting the keynote paper at the seminar said gas-based
steam turbine system and even open cycle gas turbine have been phased out in
most of the countries, as power generation efficiency of the two system were less
than 30% and about 40% respectively.
Coal generated 45% electricity in USA, 35% in UK, 41% in Germany, 43%
in South Korea, 67% in China, 57% in India and only 2.5% in Bangladesh. Gas
generated 23% electricity in USA, 39% in UK, 21% in Germany, 18% in South
Korea, 3% in China, 9% in India and 64.5% in Bangladesh.
Referring to the Bangladesh-India Joint-Venture 1320MW Maitree Super
Thermal Power Project to be completed in 2018, Shahi said similar kinds of
projects might be initiated in next two or three years and said Public private
partnership should come in to make power projects successful.
Mr. Sandeep Chakravorty, Deputy High Commissioner, said Bangladesh needed
diversified fuel source for power generation to ensure affordable electricity. As
gas and LNG (Liquefied Natural Gas) based electricity were costly, the better
option was to go for coal-based power plant to generate reliable and sustainable
electricity, he added.
Bangladesh’s proposal for hydropower from India was under consideration,
adding that a meeting between India and Bangladesh would be held in the
coming month to discuss use of diversified fuel source for power generation.
Md Abul Kalam Azad, Secretary of Prime Minister’s Office and Chairman
of Power Grid Company of Bangladesh said although locally produced or
imported coal-based power plant was cost-effective, it took more time as the
country did not have adequate infrastructure facility.
Mr. Monowar Islam, Power Secretary said Bangladesh currently had no
plan to set up a domestically produced coal-based power plant. However, the
1,320MW Rampal power plant is to be set up on imported coal, as coal-based
power plant is affordable and sustainable. Emphasising on regional cooperation
for hydropower generation, Mr. Monowar said it was necessary to develop
regional power grid for distribution of hydropower.
Dr M Tamim, Energy Specialist said what Bangladesh suffered from
shortage of power. Tariff of gas-based power would be higher with increasing
gas prices and LNG-based power plant was also costly. He added that the best
option to lift the economy is to go for coal-based power generation under public
private partnership.