The government of Bangladesh has approved proposals that will allow both local and foreign private investors to build and run small power plants with capacities of 10 – 50 MW.

Capacity from such plants will be sold to private customers with the government only buying the output when necessary and then at the same rate as that paid to other private firms under existing agreements.

According to comments attributed to Finance and Planning Minister M Saifur Rahman, “The private power producers will have gas supply at a same price as PDB (Power Development Board).”

It is hoped that the move will prompt private investment into the cash-strapped nation’s power sector which is facing a shortfall in capacity by 2007 without $1.6 billion in investment.

The decision is intended to prompt local and foreign firms to set up at least 15 small power plants.