Originally posted in The Dhaka Tribune on 09 November 2022
Bangladesh Bank (BB) in a directive has withdrawn the lending limit for coal-based power plants aiming to increase power generation.
As per the directive, banks can lend money to set up coal-based power plants as required for power generation in the next 5 years, reports UNB.
Md Ali Akbar Faraji, director of banking regulation and policy department, issued the notification as Bangladesh is struggling to run gas-based and diesel-run power plants amid rising oil prices because of the Russia-Ukraine war.
It says the banks can provide necessary loans for setting up coal-based power plants, including the purchase of land, import and purchase of machinery, expenses related to the installation of machinery, and maintenance of coal-based power plants.
As a result, the calculation of lending 25% of the reserved capital to get bank loans will not be effective for the next five years.
In July, Bangladesh Bank gave such instructions for six months.