Govt keen on speedy execution of deals with Saudi Arabia

The Bangladesh government is set to embark on the speedy implementation of bilateral trade and investment agreements with the Kingdom of Saudi Arabia.

Several agreements have been inked with Saudi Arabia over investment in the energy and power sector. But none came into being, so far.

Also, Bangladesh has got several agreements signed with the Middle Eastern country to enhance bilateral trade. The last Saudi Foreign Minister Prince Faisal bin Farhan Al Saud visited Dhaka on a 2-day trip last March and expressed his interest in investing about $10 billion in some 10 projects of various sizes.

Bangladesh is eager about the KSA’s investment, especially in the electricity and energy sector since the country is facing acute power shortages.

Electricity production has fallen below the country’s demand. The government has been enforcing power outages and staggering holidays for industries to lessen pressure on imported fuel oil.

That is why the government wants speedy execution of projects pledged by the Saudi authorities.

Riyadh’s investment in the power sector is considered with great importance.

Officials are chalking out paperwork ahead of the 14th meeting of Bangladesh-Saudi Arabia Joint Commission (JC). The Economic Relations Department (ERD) has already finalised the proceedings of the meeting. Bangladesh wants KSA to play a bellwether role in the power and energy sector, according to commerce ministry sources.

If investment in these projects starts, some $10 billion will come to Bangladesh within the current financial year, sources said.

Earlier in 2019, two agreements and four memorandums of understanding were signed with Saudi Arabia for investments in various sectors of Bangladesh, including the power and industrial sectors.

These agreements were signed in the presence of Prime Minister Sheikh Hasina in a ceremony organised at her office.

If these agreements are converted into actions, KSA’s bilateral trade and investment with Bangladesh will enhance significantly.

Saudi Arabia’s state-owned oil company Aramco has shown interest in building, operating and maintaining an oil refinery. It will cost some $ 1.5 billion to $ 2 billion. The Kingdom’s firm Engineering Dimension LLC is very enthusiastic about investing in Bangladesh. The company showed its interest in investing in 7 projects and had pledged to invest around $1.685 billion during an International Investment Conference held in Dhaka in November last year.

In this context, the Executive Chairman of Bangladesh Investment Development Authority Sirajul Islam told Business Insider Bangladesh that Saudi Arabia’s investment in electricity and energy sector is urgently needed at this moment.

He said Engineering Dimension is one of the companies that have shown interest in the construction of Dhaka East-West Elevated Expressway. It is reported that some Saudi investments are already in the pipeline. These include development of Patenga Container Terminal with Red Sea Gateway Terminal under a Public-Private Partnership, he added.

Islam said Saudi investment will depend largely on how successfully ‘we manage the projects in the pipeline’.

ACWA Power, an internationally renowned energy company, has expressed its interest in investing around $600 million to build a 730 MW combined cycle power plant in Chittagong. Al-Fanar plans to invest some $100 million to build a 100 MW IPP solar project under a joint venture. Al Bawani is interested in investing around $10 million to employ skilled human resources for some construction and engineering projects.

Among the sectors Saudi Arabia wants to invest in are manpower and employment, development of bilateral economic and trade relations, civil aviation and tourism, information and communication technology and the religious sector.

The Bangladesh-Saudi Arabia Joint Commission meeting will be held in Riyadh, Saudi Arabia on October 30-31. Dhaka will seek Riyadh’s cooperation in the export of electricity, energy, manpower and increasing export of manufactured goods, export of halal products, especially fish and meat, export of agricultural processed products and fertiliser production, according to the commerce ministry sources.

Commerce Secretary Tapan Kanti Ghosh told Business Insider Bangladesh that Bangladesh has prepared for a joint commission meeting between Bangladesh and Saudi Arabia.

He said the agreements already signed must be implemented now. It is reported that there will be an agreement between Petrobangla and Aramco regarding liquefied natural gas (LNG) production. This will solve the country’s LNG crisis, he added.