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ON APRIL 12, 2005

H.E. Mr. Iqbal Hassan Mahmood,
Honorable State Minister for Power;
H. E. Mr. Dietrich Andreas
Honorable Ambassador of Germany;

Distinguished officials of the APSCL and IHI;
Distinguished PDB and Ashuganj Power Station officials;

Ladies and gentlemen;
Assalamu Alaikum.
It is indeed a great pleasure for me to be present here today at the Protocol Signing Ceremony of the Overhauling Contract of Unit 4 & 5 of Ashuganj Power Station. I warmly congratulate all concerned for making this event a success. This is a milestone event in the power sector of Bangladesh as the 33,150 megawatt (MW) Ashuganj Power Station is one of the biggest and most important stations. It is expected that through the overhauling of the mentioned units, the station will be able to run to its full capacity and make a big contribution in meeting the ever-increasing electricity needs to accelerate the country's overall development. I also take this opportunity to pay my special gratitude to the Honorable Minister for Power Mr. Iqbal Hassan Mahmood for joining us in making this event memorable.

The Ashuganj Power Station has a total number of five units. Out these, the 3rd, 4th and the 5th units are of 150 megawatt (MW) each. The above three units were installed in 1986, 1987, 1988 respectively. Meanwhile, the overhauling of the third 150MW unit was completed in 2003. For the overhauling of the 4th and 5th units, tenders were invited and finally IHI of Japan and Alstom of Germany were qualified.

The project will be implemented under the Japanese Debt Relief Grant Aid (DRGA) Counterpart Fund portion worth 40.3 million Euro (approximately 330 crore taka, or 50 million US dollars) and KFW portion 32 million Euro (approximately 260 crore taka, or 40 million US dollars). The overhauling of the earlier three units of Ashuganj Power Station was also carried out using DRGA Counterpart Fund.

I warmly congratulate both the companies who have won the right to carry out the overhauling work. I have full confidence that with their wide expertise, the companies will be able to carry out the project most effectively within the fixed implementation period of 29 months.

I am told that generally, there is a system of overhauling, rehabilitation and modernization after 8 to 10 years of installation of units. But due to fund crisis, this process was delayed by many years. But I'm extremely happy to see that Japan as one of the major donors, together with other donor countries and organizations is implementing this project under its DRGA Counterpart Fund. The Japanese government provided DRGA to eligible debtor countries including Bangladesh in return for repayment of their OD A debts. The total DRGA provided to Bangladesh amounts to 256.8 billion yen equivalent to Taka 15,230 crore or US$ 2,538 million until March 2005. One-fourth of this amount were deposited to Bangladesh Bank in local currency as DRGA Counterpart Fund and were subsequently used for development efforts including this project.

Ladies and gentlemen;
Power development is one of the top priority areas for poverty reduction strategy of the Government of Bangladesh and a very important area for Japanese assistance. Electrification is a catalyst for development and poverty reduction. Development of the power sector triggers economic development in rural as well as urban areas through encouraging both industrialization and sustainable agricultural production.

The Government of Japan has, over the years, built effective partnerships with the Bangladesh Government. We have generously supported construction and development of hydroelectric power plants, barge-mounted power plants, rural electrification projects, power system distribution efficiency and enhancement across Bangladesh through extending a series of soft loans, DRGA Counterpart Funds and technical cooperation. For example t hrough the Japan Bank for International Cooperation (JBIC) a series of soft loans have been extended to the REB and the PBSs since the inception of this important development program in 1976. The success of the REB and the 67 PBSs is widely recognized by the international donors based on their high level of performance in delivering electricity service to more than 4.2 million consumers. We still remain committed to assisting Bangladesh in all possible ways to widely develop its power infrastructure.

In conclusion, I hope that today's ceremony will be long remembered as a milestone of effective collaboration among donors, the government and people of Bangladesh.

Thank you all.

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