Huge growth prospects of rental power in Bangladesh

The Indian subcontinent power rental market was valued at over $100 million in 2014 according to a research report by Verify Markets. The market in India was the largest within the Indian Subcontinent by far followed by Pakistan and then Bangladesh. Bangladesh also contributes towards the temporary power or rental power plants in the region. However, those plants have an uncertain future. Once the country commissions its permanent power plants, most of those plants will likely shut down by 2020.

Many of these permanent power plants were to be commissioned earlier, however, there have been ongoing delays, giving many rental power plants an extension. These base loads (or permanent power plants) are still not on schedule; this provides better prospects for rental power plants for the country. Pakistan also had rental power plants until 2012, when corruption in distributing generation licenses resulted in their closure. These rental power plants are in the process of revival and will likely serve the nation again, though for a short duration only. Two plants have already been given licenses by the National Electric Power Regulatory Authority (NEPRA) of Pakistan.

Construction emerged as the single largest end-user segment for the power rental market across the Indian Subcontinent, followed by the textile industry. Major drivers for the power rental market in the Indian subcontinent include power deficit, economic and industrial growth. Major restraints for Indian Subcontinent power rental market include the presence of small and unorganized companies, inherent tendency of people to own things that they require versus renting, and government plans to develop base power capacity. However, every country has specific drivers and restraints, which have been captured in the report.

The Indian power rental market is still evolving, is unorganized, competitive and price sensitive. There is a presence of several regional and local companies. Large companies make up a sizable market due to the clear focus of market segment they wish to target. Pakistan’s huge deficit of 5 GW is the key driver for the power rental market in the country. Bangladesh’s power rental market is also still evolving and offers a good business opportunity and growth prospects for new participants.