DHAKA, Oct 11 Bangladesh has approved a plan to lease eight mobile power plants with a to

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DHAKA, Oct 11 (Reuters) Bangladesh has approved a plan to lease eight mobile power plants with a total 300 megawatt of capacity with a $100 million World Bank loan, to help ease its chronic electricity shortage, an official said on Thursday.

The head of the army-backed interim government, Fakhruddin Ahmed, who is in charge of the Ministry of Power, Energy and Mineral Resources, approved the proposal by the Power Development Board (PDB) to lease the plants mounted on barges or trailers.

The state-run board will buy the electricity produced from the plants, which will be leased by the private sector before next summer, to add to the national grid over three years up to 2010, the senior government official said.

''This is a temporary measure to ease the nagging power crisis and we hope to build a number of major power projects to solve the crisis gradually,'' A.S.M. Bazlul Haque, a director and spokesman for the PDB told Reuters.

The ministry's power division has reached a deal last month for a $100 million loan from the World Bank that will also be spent for other development works in the power sector.

The power plant lease, the first project of its kind, will use natural gas for electricity generation across the country, while some plants will be fired by oil where natural gas is not available.

Bangladesh urgently needs to boost supply to its national grid to overcome a daily shortage of up to 2,000 MW against demand for 5,000 MW, officials said.

But its decades-old power plants numbering about 60, have either reached their optimum level or unable to produce as much because of technical glitches, they said.

Frequent power failures cut the country's gross domestic product by around $1.0 billion annually, the World Bank said, adding that Bangladesh would require $10 billion in investments in the next 10 years to overcome the shortages.

(US$1 = 68.70 taka) REUTERS MP PM1600

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