Skip to main content

Why does Bangladesh need urgent Saudi Arab investment in power and energy sector?

By Samina Akhter* 
With the aim of increasing bilateral trade and mutual economic cooperation, special attention must be paid to the 'Middle East'. Bangladesh seeks cooperation in at least 12 sectors from the top ten countries of the Arab world or the Middle East to overcome the ongoing power and energy crisis, the impact of the Russia-Ukraine war and the financial loss of the epidemic corona. One of these is the power and energy sector.
Maximum emphasis has been placed on easy terms of investment and energy imports from the Middle East in this sector. In addition to this, the government is interested in new manpower exports and product exports to collect remittances, one of the sources of foreign exchange. A meeting of Bangladesh-Saudi Arabia Joint Commission (JC) has been called in Riyadh, Saudi Arabia by the end of this month.
Looking ahead to that meeting, Saudi Arabia wanted to know what kind of cooperation Bangladesh wants to increase bilateral trade. The Economic Relations Department (ERD) will present an outline of economic cooperation and investment at the JC meeting itself.
It is known that assistance will be sought from the Middle East to resolve the ongoing power and energy crisis. Frequent load-shedding and rising prices of all types of fuel have increased the cost of production in the country. Its biggest impact is noticeable in inflation. In addition to this, the majority of remittances come from Middle Eastern countries. Due to this reason, the stakeholders have urged to increase mutual economic cooperation and bilateral trade with the Middle East. More than 80 percent of the fuel oil used in Bangladesh is imported from some countries in the Middle East including Saudi Arabia.
Similarly, most remittances are being extracted by exporting unskilled manpower to Middle Eastern countries. Most of the fertilizers used in agricultural production are imported from the Middle East. But the economy of Bangladesh is under pressure due to the ongoing global crisis and the increase in dollar prices. Inflation is increasing.
In this situation, the dollar crisis and the increase in the price of all types of fuel are making it more difficult to maintain the continuity of production. As a result, there is increasing load shedding and disruption of production. Initiatives have been taken to increase mutual cooperation with Middle East countries to overcome the current situation. Bangladesh is dreaming of developing economic relations with the Middle East.
The government is preparing to attend the 14th JC meeting to be held in Riyadh, Saudi Arabia on October 30-31. Bangladesh will be represented in that meeting by high-level representatives of the Economic Relations Department of the Ministry of Finance. Before attending the meeting, ERD held several inter-ministerial meetings on the initiative of the Ministry of Finance.
In these meetings, economic relations with other countries of the Middle East, including Saudi Arabia, have been urged to be strengthened and bilateral trade increased. Besides, cooperation in 12 sectors will be sought from the Middle East. These include development of bilateral economic and trade relations, manpower, employment and consular, private aviation, tourism and cultural, investment, Abu Dhabi Development Fund, electricity, energy and mineral resources, information and communication technology sector, education, science and technology sector, marine environment. Cooperation in development, agriculture, healthcare and health education sectors and humanitarian and charitable assistance is one of them.
Saudi Arabia has already expressed its positive attitude towards increasing cooperation with Bangladesh. Not only that, Bangladesh-Saudi Arabia has signed several agreements and memoranda of understanding to increase bilateral trade and investment. In addition, bilateral trade and economic cooperation with Saudi Arabia will be increased with the United Arab Emirates, Qatar, Bahrain, Oman, Iraq, Kuwait, Lebanon, Egypt and Turkey.
An official letter has been given to these countries by the Commercial Counselor of Bangladesh Embassy abroad to increase bilateral trade and manpower export. Besides, the government has taken a special initiative from the Middle East Branch-1 of the Economic Relations Department (ERD). An outline in this regard will also be presented in the JC meeting to be held with Saudi Arabia. Bangladesh Investment Development Authority (BIDA) has a separate program around the Middle East.
Saudi Arabia has already been informed about ensuring one-stop service from the bidder's side. ERD believes that if mutual economic cooperation with Saudi Arabia, the top country of the Arab world, increases, bilateral trade with other countries in the Middle East will also increase.
And for this reason, preparations are being made vigorously in front of the 14th JC meeting. A high-level delegation from Bangladesh is expected to participate in the meeting. In this regard, Finance Minister AHM Mustafa Kamal said that currently there is an excellent environment for investment in Bangladesh. There is considerable potential for investment on Public-Private Partnership (PPP) basis, particularly in major infrastructure, information technology, communication, agriculture, power and energy, medical sectors.
Middle East entrepreneurs including Saudi Arabia can take investment opportunities in those sectors if they wish. Professional, skilled, semi-skilled and unskilled manpower is still in great demand in the Arab world. Middle East countries can take huge manpower from Bangladesh if they want. He said that the country's electricity and energy sector needs investment and cooperation from the Middle East, including Saudi Arabia. To deal with the ongoing crisis, the government will take the cooperation of Saudi Arabia and other countries in the power and energy sector.
According to Bangladesh Petroleum Corporation or BPC data, the country imports 6.5 million tons of fuel oil annually. Of that, 4 million tons of diesel is imported annually. More than 90 percent of vehicles in the transport sector in the country are dependent on fuel oil. Again, 34 percent of the power generation capacity depends on fuel oil.
For these fuels, we have to depend on Saudi Arabia and other countries in the Middle East. Bangladesh imports refined and crude fuel oil. The foreign companies supplying oil are Saudi Arabian Oil Company (Saudi Aramco) of Saudi Arabia, Abu Dhabi National Oil Company Limited (ADNOC) of the United Arab Emirates, Kuwait Petroleum Corporation (KPC) of Kuwait, Petco Trading Labuan Company Limited (PTCL) of Malaysia, Emirates National Oil of the United Arab Emirates. Company (Inc), China's PetroChina (Singapore) Pte Ltd and Unipec (Singapore) Pte Ltd, Indonesia's PT Bumi Siak Pusaku (BSP), Thailand's PTT International Trading Pte Ltd, India's Numaligarh Refinery Limited (NRL).
Apart from this, BPC also buys fuel oil through open tender. In other words, more than 80 percent of fuel oil is imported from Middle East countries including Saudi Arabia. Earlier in 2019, two agreements and four memorandums of understanding were signed with Saudi Arabia for the development of various sectors of Bangladesh, including the power and industrial sectors. These agreements and agreements were made in the presence of Prime Minister Sheikh Hasina in a ceremony organized at her office.
Samina Akhter
If these agreements are implemented, the country's bilateral trade and investment with Bangladesh will increase. It is believed that both countries will benefit economically. Especially the ongoing crisis in the power and energy sector of the country will be removed. Besides, bilateral trade with Saudi Arabia also has great opportunities and possibilities.
In addition, Saudi Arabia's state-owned oil company Aramco has already shown interest in building, operating and maintaining an oil refinery. It will cost 1.5 to 2 billion dollars. Saudi firm Engineering Dimension LLC is very enthusiastic about investing in Bangladesh.
The company is interested in investing in 7 projects and has pledged to invest around 1.685 billion dollars during the International Investment Conference held in Dhaka in November last year. Saudi Arabia's investment in the power and energy sector is urgently needed at the moment. This issue should be given maximum emphasis in any forum discussion with the country.
Engineering Dimension is one of the companies that have shown interest in the construction of Dhaka East-West Elevated Expressway. Some Saudi investments are already in the pipeline. These include the development of Patenga Container Terminal with Red Sea Gateway Terminal in Public Private Partnership. Further Saudi investment will largely depend on how successfully the projects in the pipeline can be managed.
ACWA Power, an internationally renowned energy company, has expressed interest in investing around $600 million to build a 730 MW combined cycle power plant in Chittagong. Al-Fanar plans to invest $100 million to build a 100 MW IPP solar project in a joint venture. Al-Bawani is interested in investing about $10 million in the employment of skilled human resources for construction and engineering projects.

Bangladesh-Saudi Arabia joint commission meeting preparation

Preparations for the 14th meeting of the Bangladesh-Saudi Arabia Joint Commission have started in full swing. The Economic Relations Department (ERD) of the Ministry of Finance prepared the working paper on behalf of Bangladesh. In the meeting to be held in Riyadh, Saudi Arabia on October 30-31, the cooperation of Saudi Arabia will be sought in the export of electricity, manpower, increasing the export of manufactured goods, export of halal products, especially fish and meat, export of agricultural processed products and fertilizer production.
Besides, Bangladesh has the opportunity to export clothes to other Middle East countries including Saudi Arabia. The entrepreneurs of the country's garment sector have expressed their interest in this regard. Saudi Arabia will be requested to speedily implement the agreements made with Saudi Arabia at various times. In this context, Bangladesh has prepared for the Bangladesh-Saudi Arabia joint commission meeting.
Bangladesh has several bilateral trade investment agreements with Saudi Arabia. These agreements must be implemented now. It is reported that talks are going on between Petrobangla and Aramco regarding a liquefied natural gas (LNG) deal. This will solve the country's LNG crisis. Besides, Eastern Refinery Unit-2 has sought Saudi Arabia's cooperation in processing 3 million tons of crude palm oil per day.
If it is implemented, 68 thousand barrels of refined petroleum will be available. MoU will be signed between Bangladesh Power Development Board and world renowned ACWO Power. It is expected to make great progress in the renewable energy sector in the country. It has an agreement with Saudi Arabia to build a 100 MW Solar Independent Power Plant (IPP) and manufacture transformers and electrical components.
These agreements need to be implemented quickly. Meanwhile, 20 more Saudi Arabian companies have shown interest in investing in Bangladesh, said Foreign Minister Dr. AK Abdul Momen recently. After a recent meeting with a delegation of Saudi Arabia, he added, "We will give them all the facilities they need." Both countries have much more to do in terms of trade and investment cooperation.
Besides, the country is also interested in investment on the basis of public-private partnership or PPP. Saudi Arabia will mainly invest in Bangladesh's infrastructure, medical, tourism and other sectors. A memorandum of understanding has been signed with Saudi Arabia. Salman F Rahman, Adviser to the Prime Minister on Private Industry and Investment on behalf of Bangladesh, signed one such MoU a few months ago. However, countries of the Middle east especially Saudi Arabia's investment in the power and energy sector is urgently needed at the moment.
---
*Dhaka-based columnist, deeply interested in the foreign policies of Bangladesh and other South Asian countries

Comments

Post a Comment

TRENDING

Abrogation of Art 370: Increasing alienation, relentless repression, simmering conflict

One year after the abrogation by the Central Government of Art. 370 in Kashmir, what is the situation in the Valley. Have the promises of peace, normalcy and development been realised? What is the current status in the Valley? Here is a detailed note by the People’s Union for Civil Liberties , “Jammu & Kashmir: One Year after Abrogation of Art. 370: Increasing Alienation, Relentless Repression, Simmering Conflict”:
3 comments
More»

Repeated failure to appoint Chief, other commissioners undermining RTI Act

By Anjali Bhardwaj, Amrita Johri* The post of the Chief Information Commissioner of the Central Information Commission (CIC) has fallen vacant with the retirement of Bimal Julka with effect from August 27, 2020. This is the fifth time in the last six years that the Commission has been rendered headless. Four posts of information commissioners are also vacant in the CIC. Currently more than 35,000 appeals and complaints are pending in the commission resulting in citizens having to wait for months, even years for their cases to be disposed, thereby frustrating peoples’ right to know. Since May 2014, not a single commissioner of the CIC has been appointed without citizens having to approach courts. The failure of the government to make timely appointments of commissioners is a flagrant violation of the directions of the Supreme Court. In its February 2019 judgment, the apex court had categorically stated that if the CIC does not have a Chief Information Commissioner or required strength
Post a Comment
More»

Panchayat funds defrauded: Roads without potholes a fundamental right but not here

Kirity Roy, Secretary Banglar Manabadhikar Suraksha Mancha (MASUM), and National Convenor (PACTI) Programme Against Custodial Torture & Impunity, writes to the chairman, National Human Rights Commission: *** Through this complaint, I want to draw your attention to the plight of the villagers of Nawdapara in the District of North 24 Parganas. The village is situated under the Bagdah Police Station, Bagdah Block and Mama Bhagina Post Office respectively. Nawdapara is a Muslim minority populated village. Indo Bangladesh Border Road (IBBR) passes through the middle of the village. There is a naka checking post of the BSF inside the village and BSF associated with Mama Bhagina Border Out Post, 68 Battalion, ‘B’ Company guard 24 hours in that check post. People have lived in this village since the independence of India. The market is about three to four kilometres away from Nawdapara village. One primary school is situated within the village but the high school is about five to six kilo
Post a Comment
More»

Ultimate champion in crisis, arguably best ever skipper: Created history in Aussie cricket

By Harsh Thakor  In the history of cricket few cricketers knit and propelled a cricket team or had such profound influence on the game as Ian Chappell. Ian Chappell was responsible for converting a bunch of talented individuals into a world beating side, giving a dramatic turn to Australian cricket. Few cricketers ever led such a renaissance.
Post a Comment
More»

BSF's unconstitutional, whimsical order violates life, livelihood of Dalits, minorities

Kirity Roy, Secretary, Banglar Manabadhikar Suraksha Mancha (MASUM), writes to the Chairman, National Human Rights Commission: *** I want to attract your attention towards the illegitimate restrictions on the life and livelihood of the villagers of Paschim Sahebganj village under Dinhata - II Block and Sahebganj police station in Cooch Behar district of West Bengal by the Border Security Force personnel attached with Dharala Border Out Post under 138 Battalion BSF. The population of Paschim Sahebganj village is around 1480, where almost 75 percent of the villagers belong from Hindu Scheduled Caste (Dalit) and 25 percent from minority Muslim backgrounds.The main occupation of the villagers is agriculture. About 260 acres of cultivable land in the village that belongs to the villagers is located outside the border fencing, which is heavily guarded by the Border Security Force (BSF). The BSF regulates the ingress and egress of the villagers to their fields through the fencing gates that a
Post a Comment
More»

Largest democracy in world has become weakest at hands of fascist Hindutva forces

Note on “The Nazification of India”, a report released By Justice For All: *** This report, the Nazification of India, compares how Hindutva ideology not only is inspired by Nazis and Fascists of Europe, but their treatment of the Muslim minority closely follows developments that resulted in pushing Jews to the gas chambers. Situation is indeed quite alarming. The report says that the largest democracy in the world has become the weakest at the hands of the fascist Hindutva ideology. India today is ruled not just by a political party the Bharatiya Janata Party (BJP), but its mother organization the Rashtriya Swayamsevak Sangh (RSS). Because the BJP’s government policies are linked to extra-legal enforcement by RSS paramilitary street power, this report has coined the term “The BJP-RSS regime” to reflect their intrinsic links and collaborative relationship. The Nazification of India report marks the anniversary of the Gujarat pogroms of 2002 against Muslims which propelled the BJP-RSS
Post a Comment
More»

Varanasi social worker who has devoted her life for the ultra-poor and the marginalized

Passion Vista and its partners profile Founder and Managing Trustee Shruti Nagvanshi as  someone whom women leaders look up to: *** Shruti Nagvanshi, a social worker and human rights activist based in Varanasi, Uttar Pradesh, has devoted her life to reaching out to the ultra-poor and marginalized communities in India. Born in Dashashwmedh, Varanasi on 2 January 1974, she married Dr Lenin Raghuvanshi on 22 February 1992 and has a son, Kabeer Karunik, a Business management Graduate who is also a national level snooker player.
Post a Comment
More»

An approach to lake/pond restoration by Ramveer Tanvar, Pond Man of India

By Monami Bhattacharya*, Mansee Bal Bhargava**  Lakes/ ponds are often referred to as an elixir of life, a living ecosystem that adds incremental value to the larger biota. Across the tropical landscape of the country lakes/ ponds are a common sight. Lakes/ponds have always shaped the life and livelihood of those dwelling in and around it. The dependence of the local population on these natural resources of water is noticeable since time immemorial. However, they are fading fast in both rural and urbanscapes from the popular parlance with the advance of humanity. It has been a popular notion to value land more than the waterscape and hence these nurturers of life are under stress in several areas. In many instances, these once beautiful waterscapes referred as the ‘Eye of the Earth’ are mostly now only dilapidated garbage dump yards emitting foul smell with no sign of a healthy ecosystem.
Post a Comment
More»

Urban crisis: Impact of erosion of democratic framework on Indian cities

By IMPRI Team  On 13th February, 2023, IMPRI Impact and Policy Research Institute, New Delhi in collaboration with ActionAid Association India arranged a book launch followed by lecture series under the title “India’s G20 Presidency & the Urban Agenda for the Developing Countries”. The event was held in Indian International Centre (IIC) Annex, New Delhi. The event began with the book inauguration session, under the honorary presence of Mr Sitaram Yechury, former Rajya Sabha member and General Secretary, CPI (M), accompanied by Mr Sandeep Chachra, executive director, ActionAid Association India. Session 1 | Book Launch: ‘Cities in Transition’ by Mr Tikender Singh Panwar The book launched was “Cities in Transition”, written by Mr Tikender Singh Panwar, former Deputy Mayor, Shimla and a Senior Fellow at IMPRI. Beginning with brief remarks on his book, Mr Panwar outlined the basic subject matter and the purpose behind writing the book, which he considers as a by-product of his experien
Post a Comment
More»

Why rapid transition to green energy should be people-centric and community-led

Synthesis Report of IPCC AR6 is a warning call: Grounded action needed to ensure social and ecological justice: ActionAid Association note: *** The Synthesis Report of the Intergovernmental Panel on Climate Change Sixth Assessment Report is a warning call for action on the quickly closing opportunity of keeping global warming below 1.5 degrees centigrade. Unless fossil fuels are rapidly retired, the impacts of climate change already faced by vulnerable communities will become difficult to handle. The IPCC report also highlights that we have the renewable energy technology, policy tools, and financial capital required for a just transition; however, “both adaptation and mitigation financing would need to increase many-fold”. The loss and damage caused by heat waves, crop failures, and rising sea levels suffered by majorities of India’s working peoples are already significant and uncompensated. News reports tell us that due to heat, India already loses around 101 billion hours yearly. E
Post a Comment
More»