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IDA keen to fund part of $ 430 m gas project

By Toufique Imrose Khalidi
Amid fears of gas supply " shortages that could hit coun-tiy by 1995. the International Development Agency (IDA), the World Bank's soft lending arm. has told the Government that it would finance a part of a proposed 430-milllon-dollar gas infrastructure development project.
The World Bank is ready to fund the "transmission related components" and also plans to pay for the surface facilities, but insists that the Government find some bilateral or multilateral donors or seek, private funding for development of "critically needed" new wells.
Despite adequate reserves Bangladesh faces an acute demand-supply imbalance around 1993-94 mainly due to the de-
lay in completion of necessary production, processing and delivery Infrastructure to meet the projected growth in gas demand.
The proposed Gas Infrastructure Development Pro-Ject(GlDP). primarily estimated to cost 430 million dollars. represents a major portion of the gas sector's large investment needs throughout the 1990s. with key objective to alleviate the medium term gas shortages.
The GIDP also aims at initiating the balancing of the gas system, enhancing network flexibility, substituting gas for imported petroleum fuels, scarce biomass resources and promoting private sector participation. The project components are I) 12 tn 15 gas well* at Kailastlla. Rashid pur and other gas fields. 2) surface facilities. 3) Ashuganj-Bakhrabad (A-B) gas pipeline 4) compressor station at Ashuganj; 5) Ashuganj metering station; 6) telecommunications system and control centre: 7) Petrobangla-wlde computerisation: H) environment and safety equipment: 9) technical assistance and training
I An 18-member IDA mission that visited Dhaka late last month to pre-appraise the proposed OIDP "confirmed" IDA financing of the transmission related components costing more than a third of the total coats. The mission also Indicated that It would woo the IDA management into agreeing to fund the 173-mll-Iton dollar surface facilities
However, the IDA team did not commit or indicate flnanc Ing for the new wells that would cost an estimated 52 million dollars.
The mission strongly recommended that GOB (Government of Bangladesh) and I ulrobangla should seek and confirm a financing pack-
age for the critically needed 12 to 15 new wells or the equivalent production from existing wells In the private sector’ Energy Ministry officials quoting an IDA report said
Fears continue to haunt policy planners that possible gas supply shortages as early as mid 1990s would reverse the gas sector's dynamic contribu Hon to the country's economic growth during the past decade.
According to a World Bank report released last April the costs of the shortage against the projected demand are "a combination of load shedding
a renewed claim by oil Imports on scarce foreign exchange after a decade of Impressive petroleum Import substitution.' a view shared by Bangladesh officials
An estimated 15.2 trillion cubic feet of remaining. recoverable gas reserves, the country's only commercial energy resource, could meet demands of new consumers until 2010 and permit sufficient supplies to meet total requirements for about 80 years