The Ministry of Finance (MoF) plans to issue sovereign guarantee worth $4.50 billion against the priority projects of the government by June next year.

The amount of guarantee sought by different ministries is $2.70 billion more than the limit of non-concessional loan the government is entitled to take under a credit agreement with the International Monetary Fund (IMF) until June 2013.

The projects that different ministries intend to undertake include large power projects and procurement of aircraft and railway locomotives.

The MoF has already assured different ministries of issuing the non-concessional sovereign guarantee to the tune of $1.90 billion by mid 2013, which also crossed the threshold of $1.75 billion fixed under the Extended Credit Facility (ECF) agreement with the IMF.

The finance ministry officials are now planning to seek relaxation of the limit of non-concessional loan from the IMF to meet the soaring demand for sovereign guarantees.

"We are tied to ECF conditions. But we are under pressure from different ministries as without government guarantee suppliers seldom accept any large projects," a senior finance ministry official told the FE.

"We will approach the IMF for enhancing the maximum limit of government guarantee," he added.

Of the $4.50 billion guarantee, power sector alone will need about $2.5 billion to implement its 11 large projects, sources said.

More than 2200 MW power is expected to be generated from the projects.

The power projects are -- improvement in power sector efficiency, Ashuganj 225 MW and 450 MW plants, Kodda 150 MW dual fuel power plant, Bibiyana 300-450 MW, Shahjibazar 300 MW plants, Barapukuria 250 MW thermal power extension project, Ghorasal 300-450 MW project, Ghorasal 3rd unit re-powering project and Chapainawabganj 100 MW project.

The IMF in September last agreed on the issuance of non-concessional loan guarantee by the government worth $1.75 billion until June, 2013 though the government proposed $3.0 billion guarantee ceiling.

Of the agreed total guarantees, non-concessional guarantees worth $1.0 billion may be issued by December this year, and the rest $750 million by June next year. In case the government is unable to issue the guarantee against the whole amount of the ceiling by this year, it will get the facility to carry forward the remaining amount for the same purpose, the ministry official noted.

The government has to restrict its issuance of non-concessional guarantees within the limit of $1.75 billion under the Quantitative Performance Criteria (PC) and the Indicative Targets that are included in the ECF agreement between the government and the IMF.

Neither the government nor the Bangladesh Bank can exceed the set limit of the aggregate guarantee during the stipulated time, said a MoF official.

The IMF in April last approved $987 million in loans for Bangladesh under the ECF to help the country overcome its balance of payment (BoP) constraints. Bangladesh has already received US$141 million as the first installment of the ECF fund.

The next tranche of the ECF fund is expected to be disbursed at the end of the current month, a finance ministry official said.

In addition to power projects, the officials said they were pledge-bound to issue $240 million worth of sovereign guarantee to procure 70 diesel electric locomotives for Bangladesh Railway by the next couple of months.

Furthermore, the government is also planning to issue sovereign bond of $750 million in international market by June, 2013 as Prime Minister Sheikh Hasina has already approved the issuance, a source in the ministry said.

Besides, the finance officials have earmarked $850 million as government guarantee under the head of 'miscellaneous' to be issued by the middle of next year under the heads of any urgent projects, the source added.

"It is a complicated situation to manage the huge demand for loan guarantee and convince the IMF towards our need," a high official in the finance ministry said.

He, however, expressed his optimism about securing a way out by the next month.

News: The Daily Financial Express/Bangladesh/11-Nov-12

Bangladesh Bank Governor, Dr Atiur Rahman said urban and rural citizenry and civil society groups can contribute significantly to sustainable development by fostering energy efficient, environmentally sustainable output practices; and also by adopting sustainable consumption practices and ways of life.

"Higher public and private investment in sustainable agriculture, land management and rural development will be needed to ensure sustainable agricultural production and productivity globally," he said while addressing as chair in a session on "Sustainable Production and Consumption patterns" of a day long programme on "National Consultation Workshop for the formulation of Work Plan for Rio+20 conference."

The programme was orgranised by Palli Karma Sahayak Foundation (PKSF) at its auditorium on Saturday.

BB governor said key areas for investment and support requires inclusion of sustainable agricultural practices; rural infrastructure, storage capacities and related technologies.

Ferreting to "Rio+20 conference" he said poverty eradication and promoting sustainable patterns of consumption and production, and protecting and managing the natural resource base of economic and social development are the essential requirements for sustainable development.

"This needs to be achieved by promoting sustained, inclusive and equitable economic growth; fostering equitable social and human development while promoting ecosystem conservation, regeneration and resilience in the face of current and emerging challenges," Dr Atiur added.

BB governor said Bangladesh is a low energy consuming country with per capita annual consumption of only 220 KW hours, supporting production of zero or low carbon emission energy generation. The Government of Bangladesh is trying to make the demand side management (DSM) of energy through energy efficiency and conservation measures involving making efficient appliances and equipment, he noted.

It is estimated that nearly 400MW power can be saved by changing fluorescent bulbs to CFLs and another 400MW by making electric fans efficient, he said adding  Besides, nearly 30 per cent load reduction is possible by increasing energy efficiency of fridge and air-conditioners, Dr Atiur added.

On power sector investment he said the government is investing substantially in renewable energy, particularly solar power and biogas for rural households and enterprises.

He further said the current electricity generation from Solar Home Systems (SHSs) in the country amount to 65 MW.
The target is to install 2.5 million SHSs by 2014 through IDCOL, he said.

Bangladesh plans to generate 5 per cent of its electricity from renewable energy sources by 2015 and 10 per cent by 2020, he added saying, "The government needs to focus on off-grid areas (60 per cent of rural areas) for power generation through renewable to address poverty elimination and achievement of all the MDGs."

He also said that BB has issued guidelines for Environmental Risk Manage-ment and Green Banking in 2011 aiming at ensuring environment friendly business practices by banks and financial institutions. Banks have been instructed to install solar power system while opening bank branches in rural areas.

BB has introduced Taka 2.0 billion refinance line for financing solar energy, bio-gas and effluent treatment plant (ETP), at only 5 per cent interest rate, he said adding "BB has financed 18MW PV module manufacturing plant of Rahimafroz at a cost of USD 4.5 million through BB green fund."

News: The Daily Independent/Bangladesh/11-Nov-12

The National Board of Revenue's (NBR) online tax payment facility has received a poor response so far.

Since the launch of the e-payment gateway in collaboration with Sonali Bank, the NBR has received only Tk 1.40 crore as income tax from individual taxpayers.

The collection from customs and value added tax (VAT), which accounts for 70 percent of NBR's receipts, remains very low: Tk 28 lakh from customs and none from VAT.

Kanon Kumar Roy, a director general of NBR's Directorate of Inspection, said the amounts for customs duty and VAT payment are usually higher, say Tk 5 lakh and above, and hence the low e-payment turnover.

The absence of online banking facility by all banks makes it unfeasible to pay such big amounts through the e-payment gateway.

Additionally, NBR's slow preparations in the lead-up to the launch of the portal have failed to get banks that have online banking service on board with the e-payment initiative.

The acceptance of only Q-Cash cards by the web portal explains the overall underwhelming response.

Another reason cited by the taxpayers and stakeholders is the unreliability of the online server as the 'verify challan' option of the web portal does not always show up.

The NBR is yet to address the shortcomings five months after Prime Minister Sheikh Hasina had inaugurated the portal in an effort to reduce the hassles taxpayers encounter with the manual tax payment system.

Official of firms -- electronic payment processor Q-cash, Sonali Bank and software developers Datasoft and Technovista -- blamed the lack of coordination among the implementing and monitoring officials at NBR for these issues remaining unresolved to date.

"We are not comfortable with the system. It requires us to open accounts with Sonali Bank as not all banks have the online banking facility that allows bank transfers," said a senior official of a mobile network operator.

Apart from the problems, the NBR is yet to establish a central server for data hosting, and there is no help desk or call centre to answer to the taxpayers' queries and guide them through the system.

Currently, taxpayer's queries sent by e-mail remain unattended; the NBR's last response to taxpayers' queries was on June 9, according to the e-payment.

"I placed queries twice. But I did not get any feedback," said Md Abdur Rouf, a taxpayer who also gave his phone number for getting feedback.

“Later, I paid taxes manually,” he said.

"As far as I know, no initiative has been taken from the NBR to encourage firms to pay VAT online," said a senior official of Q-cash who preferred to remain unnamed.

Roy, who coordinated the development and launch of the e-payment service, said the NBR is working to get all banks on board.

"We have issued pre-paid cards for those who do not own Q-Cash cards," said an official of Sonali Bank, preferring to remain unnamed.

"The pre-paid cards also allow taxpayers to pay tax as much as they want as there is no transaction limit for a single entry," he added.

Mahfuzul Alam, who manages the software development for NBR in favour of Technovista Ltd, said the NBR has to speed up its efforts to bring all banks to the e-payment scheme so that all debit and credit cards can be used for tax payment.

Khandokar Khurshid Kamal, who now coordinates the monitoring of NBR's e-payment facility, said it takes time to stabilise any system.

"We will sit with the stakeholders to solve all problems by this month," he said.

Manjur Mahmud, chief operating officer of Datasoft Systems Bangladesh Ltd, said a central server has to be established, while all the software have to be brought under the same operating platform.

He called for dedicated help desk and supporting the professional groups -- tax lawyers, clearing and forwarding agents -- to popularise the service.

News: The Daily Star/Bangladesh/11-Nov-12

M Farid Uddin, Managing Director of Rupali Bank Limited, seen at a meeting to exchange views with the borrowers about recovery of classified loan at the RBHRDC auditorium of the bank in Dhaka Saturday.

News: The Daily Sun/Bangladesh/11-Nov-12

KS Tabrez, Managing Director of DBBL, speaks at a foundation training course at the bank’s training wing at Gulshan in Dhaka Saturday.

Dutch-Bangla Bank Limited (DBBL) initiated a four-week foundation training course for its officers.

KS Tabrez, Managing Director of the bank inaugurated the 36th training course at the bank’s Training Wing at Gulshan in Dhaka Saturday, said a press release.

The course is designed aiming at familiarising the participants with the concepts, principles, rules, regulations and practices of banking.

News: The Daily Sun/Bangladesh/11-Nov-12