Our Growth Strategy
We expect that Bangladesh will continue to be a growth market for us in the foreseeable future. The country has a population of 165 million and is one of Asia’s most vibrant economies. Bangladesh’s 2016 nominal GDP stood at USD 221 billion, having grown at an average of 6.2% annually in the preceding ten years, effectively doubling the size of the economy. Exports have grown at a robust 15% CAGR over that same period, while private consumption has grown 11% annually. Industrial growth has been consistent over the last ten years and the nation is now the second largest exporter of ready made garments in the world, after China. Strong economic growth, industrial growth, and an increasing rate of electrification of the large and growing population are key drivers for the rapid growth in electricity demand.
Growth in the power sector has been brisk with about 8.5 GW of capacity having been added in the 2007-2017 period. Despite this, Bangladesh’s installed capacity per million people is less than half that of Indonesia and one-fifth that of Vietnam. Per capita consumption of electricity is very low at about 348 kWh, 37% of the level in Indonesia and 20% that in Vietnam, pointing to considerable demand for power and growth prospects for us in the years to come. The country currently has a supply shortfall of over 3 GW, representing a 25% capacity deficit and capacity growth in the period 2017-2022 is expected to amount to 7.6 GW, an acceleration over the rate of addition in the past ten years.
The government is promoting the establishment of LNG import infrastructure to alleviate gas shortages which are currently hindering growth in the power sector; we expect this to result in growth in gas-to-power opportunities.
We intend to continue faithfully serving the people of Bangladesh to the best of our capabilities, as we have done the past twenty years, by expanding our power generation portfolio in the country and continuing to deliver reliable, safe and competitive electricity to the growing power grid. Our pipeline of opportunities for new projects is robust and totals in excess of 3 GW. We will keep growing this pipeline and expect to secure and complete a reasonable proportion of these opportunities, in keeping with our track record.
In particular, we expect to grow our gas-to-power strategy incorporating large gas fired combined cycle projects that will be made possible by the development of LNG infrastructure. Our FSRU project and Meghnaghat 2 power project are examples of this strategic initiative.
We aim to continuously improve the quality and safety of our plant operations, benchmarking ourselves against the best in the IPP sector both regionally and globally and optimise the technical, commercial and financial aspects of our operations. We aspire to high environmental, social and governance standards, benchmarking ourselves against national regulations and criteria established by multilateral institutions.
We will selectively explore regional expansion by leveraging on our scale and experience in the power sector. With the expertise we have developed over the past twenty years, we will seek to expand regionally on a selective basis into neighbouring countries such as Sri Lanka, Myanmar, Indonesia, Vietnam and the Philippines, which have attractive growth profiles. We will look to participate in selected government and private tenders in these countries and will pursue new power generation projects by replicating a similar growth strategy as executed in Bangladesh. We will evaluate opportunities in renewable power and battery storage, positioning ourselves for growth in the new energy economy.