Legal issues on energy security and cooperation between China and South Asian Countries

Legal issues on energy security and cooperation between China and South Asian Countries

From perspective of Bangladesh presented by Sanwar HOSSAIN, Barrister at law, Advocate , Supreme Court of Bangladesh, Managing Partner, S HOSSAIN & ASSOCIATES

www.shossainandassociates.com

Introduction on legal system of Bangladesh

    • The laws of Bangladesh are based on English common law style and many laws enacted during colonial period are still the same with minor amendments.
    • The Highest court is the Supreme Court of Bangladesh.
    • There is a written constitution.
    • Laws are enacted by parliament and by delegated authorities.

Bangladesh Government’s vision for energy security

    • Toachieve energy security for the country through supply of sustainable energy services for all at affordable prices and exploit mineral resources in an environmentally sustainable manner.
    • The energy sector has been identified as the most important sector for rapid development of the country.

Opportunities for investment in energy sector in Bangladesh

    • The current electricity generation of the country is around 7700 MW, the Government plans to increase power generation to 34,000 MW by 2030.
    • The government is inviting foreign investors to set up power plants in Bangladesh to contribute to the increase of power generation.

 

Law regarding foreign investment in energy sector

    • The Policy Guidelines for Enhancement of private participation in power sector , 2008 describes in detail how foreign investors can invest and set up power plants in Bangladesh.
    • Any foreign company with adequate financial strength and technical knowledge and experience may apply for license to establish a Commercial power plant to the Bangladesh energy Regulatory Commission (BERC). The license is called Generation license.
    • The electricity generated can be sold to the Government distribution company or any large consumer such as Export processing zones, large industry etc.
    • The new power plants shall mostly rely on liquid fuel, coal etc.
    • Government is also encouraging investment on solar energy on consumer level in remote reverie areas.
    • Public private partnership for old government owned power plants.
    • The investment can be made in two ways : ROO or ROT
    • ROO means rehabilitate , operate and own
    • ROT means rehabilitate , operate and transfer
    • There isprovision for nocompetition from Government power generation companies for large consumers ofCommercial power plants.
    • Foreign companies can establish joint venture with local companies toset uppower plants.

Opportunities in specialized power generation

    • Nuclear power plants
    • Solar energy
    • LPG
    • Coal based large power plants
    • Import of electricity from bordering countries

Business registration in Bangladesh

    • Foreigners can set up a limited company in Bangladesh
    • Foreigners or foreign companies can have 100% equity shares in companies in Bangladesh.
    • Shares can be transferred any time and equity can be repatriated.
    • Can also set up liaison or branch office in Bangladesh.

Major laws affecting businesses in common in Bangladesh.

    • The Contract Act
    • The labor Act 2006
    • Negotiable Instrument Act 1861
    • Foreign Exchange Regulations

Major laws regarding energy sector

    • Bangladesh Energy and Electricity Research Council Act 2015
    • Sustainable and Renewable Energy Development Authority (SREDA) Act 2012
    • Fast Extension of Electricity and Energy Distribution (Special Provision) Act 2015
    • The Bangladesh Power Development Boards Order 1972
    • The Electricity Act 1910
    • The Electricity Act (Bill) 2015
    • Liquid Petroleum Gas (LPG) Rules 2004
    • Carbide Rules 2003
    • The Petroleum Act 1934
    • The Petroleum Rules 1937
    • Pressure Vessel Rules 2004
    • Mine and Minerals (Control and Development) Rules 2012
    • The Bangladesh Petroleum Act 1974
    • The Bangladesh Petroleum Corporation Ordinance 1976
    • Cylindered Natural Gas (CNG) Rules 2005
    • Natural Energy Policy 2004
    • Natural gas Security Rules 1991
    • Bangladesh Energy Regulatory

Major regulators in Bangladesh for foreign businesses

    • Board of Investment (BoI)
    • Registrar of Joint Stock & Companies (RJSC)
    • Bangladesh Export Processing Zone Authority (BEPZA)
    • Bangladesh Export Zone Authority (BEZA)
    • Controller of Export & Import
    • National Board of Revenue
    • Bangladesh Bank

Bangladesh Energy Regulatory Commission (BERC)

    • The BERC has been established with the vision “To make provisions for the establishment of an independent and impartial regulatory commission for the energy sector” It is generally regulated by the Bangladesh Energy Regulatory Commission Act 2003. The Commission’s mission includes:
    • Enforcement offiscal discipline ofthe energy sector
    • Introduction ofperformance targets andincentive-based regulation
    • Introduction ofuniform operational standards andquality ofsupply
    • Transparency intariff determination andeconomic efficiency
    • Increased opportunities for development ofcompetitive markets
    • Increased opportunities for efficiency andeconomic growth
    • Public involvement into the energy sector

 

Md Sanwar Hossain
Advocate in Bangladesh
LLB (Hons) Barrister at law
Advocate, Supreme Court of Bangladesh