Dhaka Power Distribution Company has taken an initiative to strengthen its capacity for power transmission and distribution in half of Dhaka city under its jurisdiction.
The company has come up with the initiative in the backdrops of frequent power cuts every day, particularly in summer, because of its inadequate and old-fashioned infrastructures in power transmission and distribution, officials said.
Besides, overhead cables of power transmission and distribution system of the company also often cause trouble in the densely populated capital city, the officials said.
The project titled Expansion and Strengthening of Power Network will be implemented in five years starting from 2017-18 financial year, said the power utility executive director Md Ramiz Uddin Sarker.
The project evaluation committee finalised the contract on Monday, he said, adding that it was now ready to be placed in the next meeting of the executive committee of the National Economic Council for approval.
Chinese EXIM Bank will provide $1.65 billion (Tk 13,200 crore), more than 70 per cent of the project cost, in supplier’s credit, said the officials.
The government will provide rest of the funding from its annual budget allocation for development work, they said.
The power division issued a letter in the past week saying the bank and financial institutions division had cleared the contract for engineering, procurement and construction of the project between the company and Chinese contractor Tebian Electric Apparatus Co Ltd.
Under the contract, the Chinese contractor will be paid $1.65 billion for the job, Ramiz said.
The project is aimed at trebling the distribution capacity to 10,000 mVA, he said, adding that a number of high-rises will be built at different locations with high voltage power sub-stations in the basements.
Some 14 grid sub-stations and 40 distribution sub-stations will be installed under the project. Every sub-station will have two transformers with spaces for further expansion, according to the project proposal.
Overhead power transmission and distribution networks in Dhanmondi and Hatirjheel areas will be replaced by underground networks, Ramiz said, adding that the company took another project to shift power transmission and distribution networks to underground in rest of its areas in Dhaka city.
On October 14, the day Chinese president Xi Jinping
arrived in Dhaka for a two-day visit, the company and Chinese EXIM Bank signed a credit agreement for the implementation of the project.
Ramiz said that economic relations division will finalise the rate of interest of the Chinese loan, repayment period and grace period through negotiations.
Chinese EXIM Bank wants to limit the grace period to five years while the company wants it to be 10 years, he said.
Usually, Chinese concessional loan holds 1.5-2 per cent interest rate plus LIBOR, London Interbank Offered Rate, Ramiz said. Now the six-month LIBOR stands at 0.56 per cent.
In October, the company also finalised the specifications and the prices of the materials to be supplied by the Chinese contractor for the project.
The company supplies 22 per cent of the national power supply covering 350 sq km area, half of Dhaka and a major part of Narayanganj.
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