4'~ ~~0 n. NP Bank0 ~oilt NDPWorldBn Public Disclosure Authorized Energy.S,ector management Program ~~~ . ~~~Activity, Coi6ip!etiik*epor't 9 ~~ .No. (0I83 14 Public Disclosure Authorized Aciiy:,PA10RITY wMSTmW PROGRAM F~OR ENRGY Public Disclosure Authorized ,~~aC MaIgy1983I Public Disclosure Authorized portte oin LNDP/WorMdBanik Energ Stor ManagemnentPr6gram Thisdocument has a restricteddistribution. Rts contents may not be disclosed 0 wvhut authoriition from the Government,the -UNDPbor the Word~Bank. Ct N4 d i Energy Sector ManagnmentProgram The Joint UNDP/WorldBank Energy Sector Management Program is designed to provide a rapid and flexible response to governmentswho request assistancein implementingthe policy,planning and institutional recommendationsof the Energy AssessmentReports producedunder another Joint UNDP/WorldBank Program, or in carryingout prefeasibilitystudies for energy investmentsidentified in these reports. The Energy $ector Management Program can provide the following types of assistancefor countrieswhich have had assessments: o assistanceto improve a government'sability to manage its energy sector, for example by defining staffing and work programs, evaluating management information needs, identifying sources of public and private finance, developinga medium-terminvestment plan; o prefeasibility work on priority investment plans, especially those which will improve the efficiency of energy use, bring about economic fuel substitution,or provideenough affordableenergy to rural areas; 3 specific short-term assistance in institutional and manpower development, both at the sectoral and agency levels. The Program aims to supplement, advance and strengthen ths impact of bilateral or multilateral resources already available for technicalassistance in the energy sector. Fundingof the Program The Program is a major internationaleffort and, w'hilethe cere finance has been provided jointly by the UNDP and the World Bank, important financial contributionsto the Program have been made by the Governments of the United Kingdom, the Netherlands,Denmark, Finland, Norway,Sweden, Australia and New Zealand. a BANGLADESH PRIORITY INVESTMENTPROGRAM FOR ENERGY May 1983 'V .;~~~~~~ 0 BANGLADESH PRIORITY INVESTMENTPROGRAM FOR ENERGY PART I INTRODUCTORYREPORT TO THE INVESTMENTPORTFOLIO . Table of Contents Page No. Bangladesh:Priority Investment Program for Energy....... 1 Scopeand Aim of PriorityInvestment Program............. 1 Overviev............................, 3 Explorationfor Hydrocarbonin Bangladesh.................4 Historical Back4round........... ........ ........ *.... 4 Present ExplorationActivities .......... 5 ExplorationDrilling Proposed by Petrobangla........ ..... 7 GasUtilization in Bangladesh............................7 Development#Transmission and Distributionof Natural Gas . ...................... 9 Developmentof Gas FieldsProposed by Petrobangla....o....11 Transmissionand DistributionNetwork Proposed by GOB.... 12 Refinery Subsector.................................. .... 15 Power Subsectoro.............. o. 16 ExternalAssistance .................................... 17 PotentialSmaller Scale Projects ........................ 22 Rankingof the Projects.... ....... .................. .. 23 Benefit-CostAnalrsis.................... ............... 25 Observationo.............................................26 Recommandations......................................... o. 29 Part II InvestmentPortfolio............................ 32 PowerProjects: 1. Upgradingof East-WestInterconnector Co 230 KV operationo........................... .... 33 2. Ashuganj-Comilla230 KV Transmission Line........................ ....... 42 3. KaptaiHydro Power Station EatentionDhaka............ Pour 45 4. GreaterDhaka Power DistributionProject, Phase II............ o ..............oo ............... 48 5. Power DistributionProject West Zone ooo...oo...0....000.............................50 6. Ghorasal-Tongi230 KV TransmissionLine o................................ 55 7. GreaterChittagong Power DistributionProject Phase IIo....................58 8. Augmentationof GridSubstations..oo ............. 61 Table of Contents Page No. 9. Power DistributionProject East Zone. ....... .* 64 10. SystemLoss ReductionScheme..................... 68 11. Barisal- PatuakhaliBhola 132 KV Transmission Line .............. 71 12. Area CoverageRural Electrification Phase Ift.A 73 13. FeasibilityStudy for Ashuganj ThermalPower Station,2nd Extention............. 76 14. BPDB Tariff Study.... ftuytfttt ... f 79 15. Pre-stressedconcrete Pole Manufacturing Plant at Aricha............ 81 16. 60 MW Gas Turbine Power Station (East Zone) Land Baseda........................................ 83 17. 60 MW Gas TurbinePower Station(East Zone) BargeMounted ........... 85 18. Pre-feasibilitystudy for MinihydroPower Generation........................................87 19. Canal drop small hydro power plant at Teesta........ 89 20. Feasibilitystudy for a 100/150MW Steam Power Stationin West Zone o .f ne.. 92 NATURALGAS PROJECTS 1. Development of Kauta Gas Field and Interlinking with Titas System 94 2. Greater Dhaka Gas Distribuition......................97 3. Developmentof RashidpurGas Field and interlinkingpipelines to Titas System.......... ft 102 4. Gas Transmission and Distribution to Mymensing and Jamalpurvia Kishorganj................ 105 5. Syihet Tea Estate Gas (Supply) Distribution(Phase II) 109 Table of Contents Page No. Gas Grid System in Eastern Zone (study) ...... 113 7. Feasibilitystudy of convertingraiLlway and river transportto CompressedNatural Gas (CNG)... 115 4U BANGLADESH . 'PIOXIsTV INVEMSTMNTPROGRAM FOR ENERGYIN BANGLADESH -Introduction 1. The purpose of this study is to establish a priority ranking of energy projects In Bangladesh, as well as to: (a) ensure that implemen- ** . tation of critical projects is not inhibited by a lack of financial resourceo, (b) eliminate duplicate and parallel projects in order to optimize future energy investment in Bangladesh; and (c) to promote a co- ordinated approach toward a priorit" investment program for energy (PIPE) in Bangladesh. All the available projects were reviewed with the domes- tic executing agencies' planning staff in Dhaka. The present exercise is based on GOBenergy policies as well as the World Bank report No. 3873-BD 'Ianladesh:* Issues and Options in Energy Sector."' It is hoped that IDA will provide assistance and support towards promoting an investment plan for the energy sector in consideration of the overall financial con- straints prevailing in Bangladesh. Scope and Aim of Priority Investment Program for Energy (PIPE) 2. The PIPE was assigned to translate specific energy projects and pr9gramsinto an investmentportfolio, with a three-foldobjective to: (a) provide a comprehensive and det-lled schedule of investments needed in the energysector, for which investmentdecisions are to be made during 1983-85; (b) preparea specificportfolio of investmentprojects and programs includingranking the prioritiesbased on the economicsof the projects; (c) assist donors in the selectionof projects for their support within the framework of the sector investment priorities. -2- 3.. The Government of Baugladesh gave its full support to the World Bank representatives In the process of the project Inventory and ce.lcula- tiohiof the net present value of the projects. All the information preeented in the project briefs was prepared and supplied by various exe- cuting agencies in Bangladesh. The Secretary of Petroleum and Natural resources devoteda great deal of his valuabletime in chairingseveral lengthymeetings and coordinatingthe work for preparationof this docu- ment. The sub-sectors covered in PIPE are representedby the main energy supplyagencies; (i) for power, the BangladeshPower DevelopmentBoard (BPDB), and Rural ElectrificationBoard (REB) ii) for oil and gas, the Ministryof Energy,Petrobargla, and, the Yariousgas companies iii) for refineryoperations, Bangladesh PetroleLm Corporation (BPC) The Power DevelopmentBoard and the Rural ElectrificationBoard submitteda total of 33 projects out of which 20 were selected and thought to have merit which could be considered for inclusion in the portfolio. Petrobangla proposed 17 projects, seven of which could be de- velope&'for inclusionin the portfolio,and the seven projects proposed by the BangladeshPetroleum Corporation should be consideredlate in 1984 when the result of the consultants'study on the ERL is available. The projectsto be consideredfor inclusionin the portfolioare summarized in Table 5 and 6. The total investmentcost of the projectsselected is a&boutTaka 18,498million (US $804.3million), of which Taka 9,191.62 -3 million '(US$ 1.1)0 millioun would be in foreipn exchange. Individual p;oject proform-a are enclosed as the complementary Part II of the report. Overview 4. Commercial energy sources (petroleumi products, coal, gas and electric power) in Bangladesh amount to about thirty-four percent of total energy demand. Import of petroleum products accounted for about 522 of total commercialenergy in 1980/1981. Tlhe net petroleum imports of around 1.6 million tons in 1980-1981 cost about US 460 millionusing * - ~about60%-70% of the country'sa foreign exchange earnings .I/ According to Petrobangla, the quantity of imported oil has not changed considerably in 1982 from that of previous year however the foreign currency is expected to cost US $ 600 million. 2/ The imported oil accounts for 46% 3/ of the ... total commercial energy, while natural gas will be 47%,,