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Investment Opportunities in Bangladesh Power Sector 2021

• The country’s power generation capacity has witnessed a boost in past decade riding on short-term costly projects, however, no significant progress yet observed in intermediate & long-term projects.
• The government provides attractive policy support for local and foreign investment in power sector including long term tax exemptions, easy capital gain and dividend repatriation, duty free machineries import etc.
• The government has been subsidizing power sector for years. The government provided over BDT500 billion as subsidy to power sector in last decade.
• The industry is highly regulated and tariff (price) is determined by the regulatory authority.
• In response to huge losses by BPDB, with a view to minimize losses, the government has been raising retail tariffs of the power each year to raise revenue of BPDB.
• The sector provides attractive investment opportunities for both direct investment in equities by sponsoring new projects or lending money to the power generation projects and indirect investment through purchasing shares or bonds of power sector stocks listed in Bangladesh Capital Market.
• Listed power generation projects has shown resilient capital market performance over the last decade with handsome dividend yield as well as capital gains.
• Despite attractive return, some old plants are still debt burdened due to suspicious significant related company loans, advances & receivables that are in most of the cases generating no income to the company.
• With rising power consumption demand, favorable policy support and to keep up with the pace of economic growth of the country, the power sector in Bangladesh has great investment prospect.