African Electrification Initiative

Practitioner Workshop

Rural Electrification

Bangladesh Experience

Presented by :

MD. NAZMUL HOSSAIN CHOWDHURY

MEMBER (ENGINEERING)

Rural Electrification Board

Bangladesh.

Rural Electrification Program in

Bangladesh

BANGLADESH

PEOPLES REPUBLIC OF

BANGLADESH

Total Area: 147570 Sq. Km

Population: 140.6 million(2006)

Population Density: 953/Km2

GDP per capita : 554 (current US$)

GDP growth : 6.21%

Per Capita Income: 599 US$

District : 64

Upazilla : 460

Total Number of Village : 84,320

80% of the total population living in

rural area

82% of the total rural area is covered

by the ACRE program

Power Sector of Bangladesh

GOB

MPEMR BERC

Power Flow Link

PGCB(An enterprise of BPDB)

DESCO

Administrative Link

IPP

DPDC

REB (DISTRIBUTION)

BPDB(Generation)

BPDB(Single buyer)

BPDB(Distribution)

Power Sector At A GlanceAs on June, 2008

Present Installed Capacity : 5306 MW

Private Sector : 1700 MW

Public Sector : 3606 MW

r Generation Capability (Including IPP) : 4130 MWr Peak Demand : 4800 MW Total Transmission Lines (230 & 132 KV) : 7848 Ckt. KM Grid sub-station Capacity

230/ 132 kV : 12 Nos. 5850 MVA 132/33 kV : 71 Nos. 7526 MVA Distribution Line (Total) : 256143 Km Total Consumers : 10.80 million (on-grid)

: 0.36 million (off-grid)

Access to Electricity of Population : 39% Per Capita Generation : 175 kWh Per Capita consumption : 145 kWh PDB Generation cost : 3.079 US cent. Overall Generation cost ( in/c IPP) : 3.42 US cent Average selling price of all utilities : 5.295 US cent Average selling price of PBSs : 4.920 US cent

In 1977 the NRECA & the Commonwealth Associates Inc.competed feasibility study on REP. The study reportrecommended :-

EMERGENCE OF REB

Bangladesh should begin ACRE program under the

framework of a perspective plan.

Each RE Project area should form a Palli Bidyut Samity (PBS),

based on the principles of consumer’s co-operative.

A central agency of GOB be there to organize, finance, administer, and

monitor the activities of the PBSs.

GOB accepted recommend and established REB through P.O. 1977 with the following target :

Establishment of Palli Bidyut Samity (PBS) based on the principles of Consumer’s Co-operative of USA Model.

FUNCTIONS OF REBMeasures for effective use of electricity .

Surveys and feasibility studies and prepare schemes.

Project proposals to the Govt. for approval and execute the

projects.

Electricity generation, transmission, and distribution system

in rural and semi urban areas of Bangladesh.

Organization & formation of PBS.

Nominate Directors for the first PBS Board.

Lending fund to PBS.

Build distribution network & all infrastructures & hand - over

those to PBS.

Set standards for all activities, materials and construction

methods.

Integration of distribution systems of others and arrange for

rehabilitation.

By-laws, Policy instructions for PBSs, their registration with

REB .

FUNCTIONS OF REB[-------Contd.]

Recommend the electricity tariff on behalf of PBSs to BERC.

Appoint officers and engage consultants, advisors, auditors

and contractors.

Construction of distribution network under ADP Funding.

Technical assistance for O & M activities of the PBSs.

Assist PBSs in its tariff fixation study.

Assist PBS in selection of officers.

Provide training for PBS employees & officers.

Set annual targets in key performance areas of the PBSs.

Monitor PBS activity for achieving Financial Sustainability

through Reduction of System Loss, Improve Collection and Controlling

expenses.

REB BOARD

CHAIRMAN

Member

Engineering

Member

PBS &

Training

Member

Finance

Member

Admin

Part time

Members

1.BPDB

2.BADC

3.BRDB

4.BSCIC

PALLI BIDDYUT SAMITY(PBS)

PBS means Rural Electric Society.

Each PBS has separate entity registered with REB.

PBS is basically a electric supply utility Cooperative.

Present numbers of consumer of PBSs varies from 35 to 270 thousand.

PBS runs under co-operative principle.

PBS BOARD OF DIRECTORS

Board comprises of a maximum of 15 Members - each representing an Elaka of the PBS.

Office bearer of Political Parties, Public/Local Bodies can’t be a Board Director.

Board Directors are elected directly by the consumer members.

Tenure is 3 years - rotating elections to maintain continuity.

Elections conducted by REB designated Election Commission

One member one vote

Women’s participation in PBS management ensured through nomination of Lady Directors Max. 3 in a PBS– they also can be elected as Directors

Board meeting is held monthly – Takes decisions and sets policy.

General Meeting of Members held annually and Board reports to members on Board accountability

FUNCTIONS OF PBS

Purchase & sale of electricity.

Sub-station & line maintenance.

Consumer complaint handling.

Line extension / Consumer connection.

Motivate people for safe use of electricity.

Tariff setting in consultation with REB.

PBSs purchase power in bulk at 33 kv mainly from

BPDB, some PBSS purchase power from SIPP

synchronized with BPDB system at 33 kv.

• No. of PBSs : 70

• Upazillas Covered : 433 out of 482

• No. of Electrified Village : 47,084 out of 84,320

• Line Constructed : 2,18,357 KM. *

• Line Energized : 2,15,300 KM.

• Integration of PDB/DESA

lines : 29,494 KM

• Total Consumer : 75,79,505 Nos.**

• Domestic : 64,51,189 Nos.

• Commercial : 7,60,933 Nos.

• Industry : 1,23,899 Nos.

• Irrigation : 2,30,353 Nos.

• Others : 13,133 Nos.

• Average Bill Collection : 99.59 %

• System Loss : Sub-station = 11.60 %

• Grid Meter = 14.97 %

• Month Outstanding 1.86

• Peak Demand : 2311 MW

• Installed Total Capacity of SIPP on BOO basis Is 193 MW In Eight PBSs.

* 85% Country’s total dist. lines.

** 70% Country’s total consumers.

ACHIEVEMENT (April, 2009)

Standardizations

a. Construction Design Standardized

b. Construction Method Standardized

c. Construction Material Standardized

d. Standardization- Key to success

623

1345

2291

2302

2821 3

167

2742

2711

3099

1570

926

364

1491

3399

3463

2606

1518

627

600

2057

883

1302

1295

1341

548

0

500

1000

1500

2000

2500

3000

3500

4000

1983-8

4

1984-8

5

1985-8

6

1986-8

7

1987-8

8

1988-8

9

1989-9

0

1990-9

1

1991-9

2

1992-9

3

1993-9

4

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003--

04

2004-0

5

2005-0

6

2006-0

7

2007-0

8

Financial Year

(No

. o

f V

illa

ge E

lectr

ifie

d)

YEAR WISE VILLAGE ELECTRIFICATION

(FY 2007-2008)

Do

me

sti

c

85

.98

%

Co

mm

erc

ial

10

.26

%

Ind

us

try

1.6

5%

Irri

ga

tio

n

1.9

3%

Oth

ers

0.1

8%

Domestic Commercial Industry Irrigation Others

CATEGORY WISE CONSUMER

(FY 2007-2008)

Commercial

7.81%

Industry

10.03%

Irrigation

32.59%

Others

0.18%

Domestic

49.40%

Domestic Commercial Industry Irrigation Others

CATEGORY WISE POWER CONSUMPTION (MWH)

US$ 1338.27 Million4

13

.47

21

0.9

6

12

3.7

3

92

.58

79

.98

74

.71

58

.00

49

.70

29

.21

25

.50

23

.60

23

.02

20

.00

19

.00

5.7

3

1.0

8

20

.00 68

.00

0.00

50.00

100.00

150.00

200.00

250.00

300.00

350.00

400.00

450.00

IDA

USAID

ADB

JBIC

KFA

ED

Net

herla

ndsC

IDA

NO

RAD

IDB

SFD

OPEC

FINLAN

DS

Chin

a Bart

er

JDRG

SAUD

I Govt.

FRA

NCE

EDCF (K

orea)

DFID

DEVELOPMENT PARTNERS

Mill

ion

US

$DEVELOPMENT PARTNERS SUPPORT IN RE PROGRAM

FINANCING OF REB

Grants made by the Government

Loans obtained from the Government

Grants and loans obtained from any sourceoutside Bangladesh with the sanction of theGovernment

1% service charge obtained from PBSs.

FINANCING OF REB

Signing Loan Agreement with GOB.

Funding from GOB to REB

Local Currency

Foreign Currency

Uniform On-Lending Term (U.O.L.T)

GOB portion as Grant.

Foreign Fund as Loan.

Re-Payment of Loan

Total Period of 33 years including 8 years of

Grace Period.

Rate of Interest : 2%

Contd. …...

[-----Contd.]

FINANCING OF THE PBSs

Registered with REB.

Legal Entity.

Loan Contract with REB.

Initial Infra-structure development & energization takes 2 to 3 years.

Operating Cash Loan of 9 to 10 Millions Taka during this period.

Rest of the loan given in kind.

Subsidy to the PBSs from GOB against operational deficit.

RATE STRUCTURE OF THE PBSs

PBS & REB Board approve Tariff Structure of the PBSs.

Factors considered for Tariff Structure

Cost of Service

Cost of Power Purchase

O & M Expense

Depreciation & Interest Expense

FINANCIAL VIABILITY(With BST of 01-01-2004)

• Out of 67 PBSs, 54 have crossed the subsidy/

grace period and DSL has been due.

• 17 PBS have reached Break-Even Point.

• These are Industrial consumer based PBSs.

• The more industrial Consumers, the earlier

financial viability.

(Textile,Ceramic,Pharma,Steel,Cold

Storage,Garments,Agro,Poultry,Fisheries,

Cottage & etc. are main industries)

GOB SUBSIDYDue to insufficient

• Number of Consumers per K.M.

• KWH consumption per K.M.

• Consumer mix

• Low Tariff rate

• Remoteness and Backwardness of the service area

GOB Subsidy in following Forms

• Subsidy in Financing

• Subsidy in Cash : On Operating loss (Difference between Operating Expense and Operating Revenue) during initial 5/6 years from Commercial Operation of the PBSs

• Lower BST

KEY FACTORS

RELATED TO SUCCESS (CONT’D.)

• Decisions based on Policies & Procedures

• Revenue Criteria for Line Extensions

• Management Audit :• Management Audit held bi-annually in the presence

of Chief Executive along with high officials of REB.

• Performance Target Agreement between REB & PBS.

• System Loss Reduction Initiatives.

• MIS report and 550 form.

• PBS Instruction Series.

• One Point Service to attend the Consumers.

KEY FACTORS

RELATED TO SUCCESS - CONT’D.

REB negotiates Performance Targeting for

the PBSs:

• GOAL– Improve performance of each PBS.

– Improve quality of Service.

– Ensure accountability.

– Provide future guidance.

• PTA OPERATIONAL PLAN– Grouping on Equity and Age.

– Targets on Key areas.

– Key targets: System loss and Accounts Receivable.

• Evaluation:– Bonus/ Penalty.

SUCCESS OF RE PROGRAM IN BANGLADESH

Low System Loss

Revenue collection - approx (98%)

A/C receivable 1.81 months (standard level -2 eq. months)

Reliability of service

Accountability & Transparency

Line construction = 42 KM / day

Village Electrified = 5 villages / day

Consumer Connected = 2000 consumer / day

Introduced a new management & accounts practices, new standard of construction and distribution engineering and above all a model of a decentralized electrical distribution systems in Bangladesh.

Increase GDP, Food Security.

OFF- GRIDRenewable Energy

Rural Electrification Board● GOB aims at providing electricity to entire rural population by 2020.

● Connecting more than 700,000 consumers every year, it would take morethan 20 years to provide access to all.

● To achieve the target a two track approach is required:

(i) expand the electricity distribution grid and

(ii) support renewable energy options to provide electricity in areas notreached by the grid by making solar home systems (SHS) available tohouseholds through PBSs

SOLAR HOME SYSTEM PROGRAM

• A total of 13,000 SHS has been installed

• Training of personnel

• Installation guideline

• Billing and bill collection procedures

• Monitoring

OFF-GRIDSOLAR HOME SYSTEM PROGRAM

• A total of 13,000 SHS has been

installed

• Training of personnel

• Installation guideline

• Billing and bill collection procedures

• Monitoring

C1

C5

C2

C9C10

C6

C8

C4

C3

C7

Chittagong Division

C1 Brahmanbaria PBS

C2 Chandpur PBS

C3 Chittagong PBS-1

C4 Chittagong PBS-2

C5 Comilla PBS-1

C6 Comilla PBS-2

C7 Cox’s Bazar PBS

C8 Feni PBS

C9 Laxmipur PBS

C10 Noakhali PBS

D18D11 D15

D9

D19D10

D14

D6

D1D1

D8

D2

D13

D16

D3

D4

D7 D17

D5

Dhaka Division

D1 Dhaka PBS-1

D2 Dhaka PBS-2

D3 Faridpur PBS

D4 Gopalganj PBS

D5 Jamalpur PBS

D6 Kishoreganj PBS

D7 Madaripur PBS

D8 Manikganj PBS

D9 Mymensingh PBS-1

D10 Mymensingh PBS-2

D11 Mymensingh PBS-3

D12 Munshiganj PBS

D13 Narsingdi PBS-1

D14 Narsingdi PBS-2

D15 Netrokona PBS

D16 Rajbari PBS

D17 Sariatpur PBS

D18 Sherpur PBS

D19 Tangail PBS

R12

R13

R18

R11

R16R2

R3R15

R6

R4R5

R1R7

R10

R14R8

R9

R17

Rajshahi Division

R1 Bogra PBS

R2 Dinajpur PBS-1

R3 Dinajpur PBS-2

R4 Gaibandha PBS

R5 Joypurhat PBS

R6 Kurigram-Lalmonirhat

PBS

R7 Naogaon PBS

R8 Natore PBS-1

R9 Natore PBS-2

R10 Nawabganj PBS

R11 Nilphamari PBS

R12 Pabna PBS-1

R13 Pabna PBS-2

R14 Rajshahi PBS

R 15 Rangpur PBS-1

R16 Rangpur PBS-2

R17 Sirajganj PBS

R18 Thakurgaon PBS

S5S4

S3

S2S1

Sylhet Division

S1 Hobiganj PBS

S2 Moulabibazar PBS

S3 Sylhet PBS-1

S4 Sylhet PBS-2

S5 Sunamganj PBS

B6

B5

B2

B1

B3

B4

Barisal Division

B1 Barisal PBS-1

B2 Barisal PBS-2

B3 Bhola PBS

B4 Jhalakhathi PBS

B5 Patuakhali PBS

B6 Pirojpur PBS

K5

K8

K4

K2

K7

K3

K9

K6

K1

Khulna Division

K1 Bagerhat PBS

K2 Jessore PBS-1

K3 Jessore PBS-2

K4 Jhenaidah PBS

K5 Kushtia PBS

K6 Khulna PBS

K7 Magura PBS

K8 Meherpur PBS

K9 Satkhira PBS

LOCATION OF THE PBSs ALL OVER BANGLADESH