Speaking at a contract signing ceremony on overhauling units 4 and 5 of Ashuganj power plant with Japan providing 40.3 million euro (around Tk 330 crore) and Germany 32 million euro (around Tk 260 crore) as grants, Andreas said Germany has contributed 4.

2 billion euros for various projects in Bangladesh since 1971.

The German government wants good governance and transparency wherever it spends its taxpayers' funds, he said at the function organised by a consortium of Japanese and German companies IHI and Alstom AG.

"This goes for Bangladesh too. It is in our common interest that the government should eliminate (any questionable) practices to ensure transparency," Andreas said at the ceremony where State Minister for Power Iqbal Hassan Mahmud was present as the guest of honour.

Referring to the grant for the Ashuganj plant, Andreas said, "We want to continue such cooperation. The aim of German cooperation is reduction of poverty and improvement of lifestyle… To help the poor to encourage them in socio-political life is the essence of German assistance."

Japanese Aambassador Matsushiro Horiguchi, IHI Associate Director and Vice President Hideo Yamada and Ashuganj power company Managing Director SR Khan were also present.

Later, talking briefly to The Daily Star, the German envoy pointed out the stagnation over a 60-million- euro German grant earmarked for two power projects of the Rural Power Company Ltd (RPCL).

This grant was subject to a condition that by March 31, Germany with its auditors would make an internal review of the two RPCL projects plagued with allegations of rampant corruption. But due to a court injunction, the review could not take place despite the government's green signal. The government still hopes the grant will be given when the injunction expires in June.

"We want to continue our support to Bangladesh. We are trying not to cancel this fund," Andreas said. "But our mandate dictates that the internal review takes place first."

Japanese Ambassador Matsushiro Horiguchi said since Bangladesh's independence, Japan has provided Debt Relief Grants Assistance (DRGA) worth 256.8 billion yen equivalent to Tk 15,230 crore.

Noting that power development is one of the top priority areas for poverty reduction strategy of Bangladesh and a very important area for Japanese assistance, Horiguchi pointed out that the IHI-Alstom consortium will complete the overhauling of the two Ashuganj units in 29 months or by late 2006 and early 2007.

SR Khan later said the five units of Ashuganj plant comprise the second biggest and the most reliable power plant in the country. Its first two units were set up by Germany in the early seventies and they are still running in full capacity following a major overhaul in the late nineties.

The units 4 and 5, each having 150 megawatt (mw) capacity, were built with Japanese and German technology in the late eighties. They are now generating 80 to 85 mw each. The overhauling will restore their full capacity and give them 25 years of new life.

Japan and Germany will provide the grant to the government, and the government will lend it to Ashuganj power company on eight percent interest payable in 18 years.