The government on Wednesday gave its nod to a proposal to set up another oil-based power plant in the country.
The approval was given at a meeting of the cabinet committee on purchase even after the power division decided to reduce the number of oil-based power plants.
The private-run Desh Energy Limited, a subsidiary of the Mohammadi Group, will set up the 15-megawatt diesel-powered power plant at Hatia in Noakhali.
Bangladesh Power Development Board (BPDB) would pay Tk1396.85 crore to Desh Energy Limited to buy electricity from the plant for 15 years.
According to the power division, the production cost of oil based electricity is the highest among various energy based power sources including oil, gas and coal.
Of these, the production cost of diesel-powered power plants is even higher, on an average Tk22 to 25.
In the last few years, BPDB has been buying electricity from these plants at an average loss of Tk6,000 a year. At the same time, oil-fired power plants are also harmful to the environment.
When asked why has the cabinet approved another oil-based power plant despite such bad impacts? Finance Minister AHM Mustafa Kamal replied that the government gave the nod to the project as there is no opportunity to generate electricity with any alternative fuel other than oil-powered in Hatia.
The committee also approved the proposals for the purchase of 40,000 solar home systems with 100 watt peak capacity and 2,500 solar community systems with 320 watt peak capacity for the three hill districts at a cost of Tk204.37 crore.
The government will purchase these solar systems from BGB Welfare Trust.