In a bid to speed up the establishment of a coal fired generating industry in the country the government of Bangladesh has approved the setting up of the Coal Power Generation Company of Bangladesh Limited under the authority of the Power Development Board.

A spokeman for the Bangladesh prime minister, Abul Kalam Azad, said that 87% of the country’s power generation is based on gas. Cabinet approval of the shift towards coal firing was motivated mainly by the fact that coal is a cheaper alternative to gas or oil for power generation.

Mr Taufiq-e-Elahi Chowdhury, the prime minister’s energy adviser, stated that government aims to set up coal-based power plants initially with a total capacity of 5000 M.

He added “the bidding process for these new plants is almost complete. We are also going to finalise a coal policy. More discussion is required for that.” Total investment in the power sector, public and private, would be nearly USD 4 billion, of which foreign investment is expected to account for USD 2 billion to 2.5 billion.

12 power plants totalling 1400 MW in capacity are currently in operation and 2000 MWe is expected to come on line during this year.