Bangladesh Bank recently relaxed its rules to facilitate lending for the establishment of coal-based power plants and buying the dirty fuel to generate electricity.
As per the central bank guidelines, lenders cannot disburse more than 25 percent of their capital.
Now though, the upper limit will not be applicable for the next five years for financing coal-fired power plants, Bangladesh Bank said in a notification.
However, the central bank will determine the upper ceiling beyond 25 percent for this period, it added.
A senior official of Bangladesh Bank said it has relaxed the rule as coal-fired power plants require large amounts of finance.
As such, the limit has been relaxed, he added while declining to comment further.
The move comes at a time when Bangladesh is producing just half of its 25,700-megawatt (MW) electricity generation capacity due to gas shortages, leading to load-shedding.
At present, two coal-based power plants are in operation while one unit of the 1,320 MW Maitree super thermal power project at Rampal in the southwest division of Khulna is expected to start operations this year.
Besides, public sector power companies are establishing three more coal-based power plants with a combined capacity of 3,840 MW in Patuakhai, Matarbari and Chattogram.
In addition, a 1,320 MW capacity coal-fired plant is being constructed by S Alam Group's SS Power in a joint venture.
