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LESSONS:

Bangladesh: Ninth Power Project

| country: Bangladesh

The approach of reform-linked lending has proved to be highly appropriate for the sector. The reform program has resulted in better management in the power sector, reduced technical and nontechnical losses, and improved the collection of revenue. The strategy of focusing on parts of the system and demonstrating what can be achieved has proved to be the correct one. In particular, the transfer of distribution systems from Dhaka Electric Supply Authority to palli bidyut samity (rural cooperative) and Dhaka Electric Supply Company Limited achieved transformational changes in performance. The establishment of Power Grid Company of Bangladesh Limited has also shown that performance of the transmission grid can be improved.

Repeated rebidding for independent power producers has discouraged private sector participation in base-load plant procurement. The Government has to take this into account and minimize rebidding.

Power Grid Company of Bangladesh Limited and Dhaka Electric Supply Company Limited have demonstrated that in-house capability in design, contracting, and supervision of project implementation can be attained through learning by doing, with limited or no support from consultants, particularly where executing agency’s ownership and commitment are strong. This compares with Dhaka Electric Supply Authority’s inability to attain such expertise and technology transfer, despite full-time assistance from international consultants. Overreliance on external assistance can be counterproductive.

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