Bangladesh Independent Power Producers Association (BIPPA), a platform of private sector power sponsors has sought loan from forex reserve of Bangladesh Bank for investment in new power plants.
In a letter to the governor of BB on Monday, it claimed the loan from forex reserve will help for setting up new IPPs and repayment of foreign loans secured for existing plants, reliable sources said.
The BIPPA said the reserve will help to implement power projects under public-private infrastructure initiative. “If such an initiative will take, then power sector will boost up and overcome difficulties in funding.”
The BIPPA also said all IPP projects in power sector get a sovereign guarantee.
At present, there is a foreign debt of about $3.0 to $4.0 billion. “If a loan is available from the BB reserve, a large amount of foreign exchange will be saved.”
Because the interest rate on foreign loans is 6 percent, they also pointed out.
However, economists are opposed to lending from the reserves. They say reserves are a dependable asset for difficult times. Again, the number of domestic institutions with good practice in repaying loans is very rare.