Energy Strategy Reviews 24 (2019) 178–192

Contents lists available at ScienceDirect

Energy Strategy Reviews

journal homepage: www.elsevier.com/locate/esr

Determinants of foreign direct investment (FDI) in the power sector: A case T

study of Bangladesh
Tareq Mahbuba,∗, Juthathip Jongwanichb
a
School of Management, Asian Institute of Technology, P.O. Box 4, Klong Luang, Pathumthani, 12120, Thailand
b
Faculty of Economics, Thammasat University, 2 Prachan Road, Phranakorn, Bangkok, 10200, Thailand

ARTICLE INFO ABSTRACT

Keywords: This paper investigates the determinants of the decision-making process of firms conducting foreign direct in-
Foreign direct investment vestment (FDI) in the power sector. With the unavailability of long-term data series on FDI in Bangladesh's power
Bangladesh sector, a mixed method approach (semi-structured interviews and questionnaires) is used. The findings indicate
Government guarantee that regulatory aspects are the most influential for firms when engaging in FDI in the power sector, followed by
Tax
economic and financial, political, and societal aspects. For individual factors, government's commitment to
Land
Gas
contracts, land acquisition, and tax exemption are key decision-making factors in conducting FDI, while road
networks, gender diversity policies such as male predominance, and the right to freedom of association such as
trade unions are considered least important. Firm-level characteristics, including firm ownership, firm size, and
contract period, are important in ranking the determinants of conducting FDI.

1. Introduction
The United Nations General Assembly has declared the decade
2014–2024 the Decade of Sustainable Energy and launched a global
initiative to make to energy services accessible to all by 2030. To that
end, it called upon member states to make accessible sustainable
modern energy a priority [1]. The Government of Bangladesh embarked
upon its Vision 2021 to comprehensively adopt energy development
strategies towards long-term energy security and sustainability [2],
including adopting new capital outlays in generation, transmission, and
distribution; diversifying the energy mix from gas to cleaner coal
technologies and renewable energy; conserving energy; and the better
use of existing installed power generation capacities.
The installation of power plants requires large capital outlays and
concomitant sophisticated technological requirements. In Bangladesh,
the investment requirements for power generation beyond 2015 are
estimated at USD 7.5 billion by 2021 and a further USD 21 billion by
2030 [3], which is beyond the ability of the public and the private
sectors in Bangladesh. As such, the Bangladeshi government encourages
the foreign direct investment (FDI) inflows in this sector, with sup-
portive policies already implemented [4] (e.g., tax exemption on roy-
alties, technical know-how and technical assistance fees, and on the
interest of foreign loans). FDIs to the power sector in 2004–2005
amounted to USD 30 million, accounting for 4% of total FDI flows,
while in 2015–2016, they increased to USD 208 million, accounting for
around 10% of total flows. In 2015–2016, FDI flows into the power
sector were close to those in gas and petroleum, and banking and tel-
ecommunication [5].
Consequently, this paper investigates the determinants of FDI in-
flows into Bangladesh's power sector. Based on previous literature on
FDI in the power sector (see section 3) these factors are grouped into
four key areas, namely regulatory prospects, political, macroeconomic,
and social viewpoints. A very recent study by Keeley and Matsumoto
[6] investigated determinants of FDI in the wind and solar energy sector
based on four categories: the institutional environment, macro-
economic environment, natural conditions, and renewable energy po-
licies. The study used semi-structured interviews with experts in wind
and solar energy investment. Results show that feed-in tariff and
competitive bidding and regulatory support policies, such as priority
access to the grid and absence of local content requirements, are more
important than traditionally argued determinants of FDI, i.e., (i) labor
costs, (ii) exchange rate volatility, and (iii) access to local finance. In
contrast to Keeley and Matsumoto [6], our study takes into account a
wider range of institutional determinants for conducting FDI in the
power sector under four broad categories of investment prospects (i.e.,
regulatory, economic and financial, political, and societal) and takes a
wider sample set of power plants, both conventional and renewables,
but is not limited to renewables per se.

∗
Corresponding author.
E-mail addresses: Tareq.Mahbub@ait.asia (T. Mahbub), Juthathip@econ.tu.ac.th (J. Jongwanich).

https://doi.org/10.1016/j.esr.2019.03.001
Received 1 April 2017; Received in revised form 25 February 2019; Accepted 6 March 2019
Available online 16 March 2019
2211-467X/ © 2019 Elsevier Ltd. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/BY-NC-ND/4.0/).
T. Mahbub and J. Jongwanich
Additionally, we further examine whether characteristics of power
plants, including ownership (joint venture, wholly owned subsidiary,
and consortium), firm size (small, medium, and large), and contract
periods lead to different sets of FDI determinants. In the context of
Bangladesh, to the best of our knowledge no study has hitherto em-
pirically analyzed factors attracting FDI in the power sector, especially
in the context of differences in firm characteristics.1
This study employs a mixed method approach, using both qualita-
tive and quantitative data by conducting semi-structured one-on-one in-
depth interviews and a questionnaire survey, respectively. Such a
combined method is better suited to understanding complex problems
and is considered superior to other mono-methodical studies, as it seeks
complementarity (i.e., elaboration, enhancement, illustration, and
clarification of the findings from one method with the results from
another) [7]. In addition, a mixed method approach helps investigate
complex issues for which long-term data series are not available for
conducting econometric analysis, as is our case, where collection of
data on FDI in Bangladesh's power sector commenced only in 1998.
The remainder of this paper is organized as follows. Following the
introduction, Section 2 presents briefly the recent outlook of the power
sector and FDI inflows in Bangladesh. Section 3 surveys relevant lit-
erature, with emphasis on the key factors that attract FDI for the power
sectors of developing countries. Section 4 presents the research meth-
odology. The results and discussions are presented in Section 5, and the
effects of power plant characteristics discussed in section 6. Conclusion
and policy inferences are presented in Section 7.
2. Recent outlook of the power sector in Bangladesh
Faced with a severe power crisis in 2009, Bangladesh adopted the
Power Sector Master Plan (PSMP) 2010 for 2010–2030 [11]. The gen-
eration plan is based on achieving 8% growth and ensuring electricity
for all by 2021. Based on these targets, the PSMP 2010 has set the
installed generation capacity target at 23,000 MW (MW) by 2020,
24,000 MW by 2021, and 40,000 MW by 2030.
The increase in power generation has been significant between June
2010 and June 2015, as total installed capacity increased from
5823 MW to 13,540 MW during this period (Fig. 1). The population's
access to electricity increased from the 2010 baseline of 48%–72% in
2015. Per capita electricity consumption also increased from 220 kW-
hour (kWh) to 371 kWh, but is still considered as one of the lowest in
the world [2].
Bangladesh's power sector is heavily reliant on gas. In 2010, around
84% of the power-installed capacity was gas based, around 4% was
coal, 4% hydro, and the remaining 8% was oil based. In 2015, with a
competing demand for gas and its continuing supply shortage, gas-
based installed capacity has fallen to 63%. The contribution of coal and
hydro are also negligible; they fell by 2% each, while 4% of power was
import-based and the remaining 29% liquid-fuel-based [2]. As of June
2015, out of a total installed capacity of 11,532 MW, the public sector's
contribution was 52%, while the private sector contributed 44% [13].
Although the generation capacity has substantially increased in the
Sixth Five-Year Plan (2011–2015), the costs of electricity production
have been increasing along with the continuing operational deficit in
the power sector. The Seventh Five-Year Plan (2016–2020) addresses
these two major issues by adopting low-cost and efficient sources of
electricity by relying more on base-load power plants rather than
rental, while the choice of power imports is moved towards a regional
base, especially with India, Myanmar, Bhutan, and Nepal. Additionally,
the choice of primary fuel has shifted from reliance on gas to imported
coal, and a small increment was registered in renewable energy, such as
solar and wind power [14].
1
There are studies examining determinants of FDI in Bangladesh, but only
from macroeconomic perspectives [8–10].
179
Energy Strategy Reviews 24 (2019) 178–192
The installation of power plants requires large capital outlays,
which is beyond the ability of the public and the private sectors in
Bangladesh. As such, foreign investors have played a key role in the
power sector. FDIs to the power sector increased from USD 30 million
in 2004–2005 (accounting for 4% of total FDI inflows) to USD 53
million (7% of total FDI inflows) in 2010–2011 and to USD 208 million
(10%) in 2015–2016. Although FDI inflows have showed an increasing
trend in the power sector over the past decade, the flows have still been
relatively low compared to other sectors, including gas and petroleum
(Fig. 2). This was an exception in 2015–2016, when the share of FDI
inflows to the power sector was close to that of gas and petroleum, and
banking and telecommunication.
3. Literature survey
Based on extant literature, factors affecting the decision of multi-
national enterprises to conduct FDI in the power sector can be grouped
into four main areas: regulatory, political, macroeconomic, and social
prospects.2 Some factors are highlighted as key in some studies but not
in others. For example, in Table 1, Woodhouse [19], examining 34
greenfield independent power producers (IPPs) in 13 countries, iden-
tifies macroeconomic, political, and regulatory as the three areas that
influence FDIs. Specifically, the study shows that strong public finances,
stable political climate, and a responsive legal framework are the most
important determinants in these areas. Lamech and Saeed [20], on a
survey of 67 European and North American firms from January to April
2002, find that decision-making regarding FDI is influenced by three
factors: a legal framework defining investors' rights and obligations,
strictness and enforcement of payments, and the availability of gov-
ernment guarantees or counter guarantees from multilateral agencies.
Bergara et al. [21] studied the role of country institutional endowments
on electricity utilities' investment decisions for a sample of 87 countries.
Their study reveals that well defined and credible political institutions
appear to be significant explanatory variables for generation capacity
(taken as a proxy for investment decision), after controlling for eco-
nomic control variables such as income levels, the degree of in-
dustrialization, and urbanization. They find judicial independence to be
particularly important as a prerequisite to a government's ability to
credibly commit to contract terms for attracting FDI.
The four areas of FDI determinants are based on the eclectic para-
digm developed by Dunning [22,23], and are extended to include in-
stitutions. The basic assumption behind this model is that, to invest in a
foreign country, a firm needs to have three different types of ad-
vantages: (1) ownership, (2) locational, and (3) internalization. For FDI
to take place, all three advantages must be present simultaneously.
Examples of ownership advantage are access to patents, specific en-
trepreneurial skills, scale economies, or superior technology. Owner-
ship advantages make it possible to move between different locations
and can thus be transferred to a foreign country. For FDI to take place,
the ownership advantage also has to be profitable for internalization by
the firm rather than the market taking care of transactions such as
selling or leasing. If an internalization advantage is missing, the firm
will serve the foreign market through exports rather than through in-
vesting in order to produce locally.
Finally, there must also exist some forms of locational advantages
specific for the geographical location that would eventually trigger
actual investment. Locational advantages are country specific and
cannot be transferred to another location such as low input costs, ex-
istence of raw materials, or special tax regimes. The eclectic paradigm
2
Numerous studies examine FDI determinants in the general FDI literature
(e.g., Refs. [15–18]), but only a few empirical studies (Table 1) examine FDI
determinants in the power sector in particular and none systematically analyze
a wider range of FDI determinants from the four broad categories of investment
prospects, namely, regulatory, economic and financial, political, and societal.
T. Mahbub and J. Jongwanich
Fig. 1. Trend in grid-based installed capacity. Note: The FY (Fiscal Year) runs from July 1 through June 30 in Bangladesh.
Source: Ministry of Power, Energy and Mineral Resources [12].
Fig. 2. Proportion of FDI in the Bangladeshi power sector, 2004–2015. Source: Bangladesh Bank [5].
focuses on economic efficiency as the ultimate determinant of location
choice for multinational enterprises (MNEs).
However, economic efficiency only partially explains the location
choice of MNEs, as they also require institutional legitimacy to survive
and succeed in a challenging foreign environment [24]. From this
perspective, it has been argued that the nexus of MNE investment ac-
tivity and institutional environment is an analysis on the ability of in-
stitutions to reduce transaction costs associated with FDI in an un-
certain foreign environment [25]. Therefore, MNEs are motivated to
enhance their legitimacy to become isomorphic to the host country's
institutional environment. As such, the need to integrate institutional
factors into FDI theory can hardly be over emphasized. Noting a lack of
institutional content in the eclectic paradigm, Dunning [26] argues it is
important to incorporate institutional factors in an extension of the
model, and his subsequent research suggests that institutions affect all
three paradigm components [27].
4. Methodology
This study employs a mixed method approach,3 which is qualitative
3
This study did not employ econometric or dynamic general equilibrium
model due to the unavailability of long-term data series from the Bangladesh
180
Energy Strategy Reviews 24 (2019) 178–192
through conducting semi-structured interviews and quantitative
through questionnaires.
To assess the ground conditions in Bangladesh, an empirical study of
25 FDI private power companies was conducted. A list of FDI power
companies, of which 14 were in operation and 11 under construction,
was prepared from the Registrar of Joint Stock Companies and Firms,
and the Bangladesh Power Development Board. The sample comprised
20 conventional power companies and 5 renewable power companies.
Out of the 20 conventional power companies, 7 were gas based, 5 liquid
fuel, 2 dual fuel, and 6 were coal based. Of the renewables, one was
wind and four were solar power based. Of the conventional power
companies, 2 were small (0–50 MW), 8 were medium (50–150 MW),
and 10 were large (above 150 MW). Of the renewables in the solar
power category, two companies were medium (1–25 MW) and two were
(footnote continued)
power sector. Collection of data for FDI in the Bangladesh's power sector
commenced only in 1998. To get trusted results from econometric or modeling
analysis, we need to have a reasonable number of observations to perform the
analysis. In Bangladesh power sector, FDI data collection started from 1998, but
from 2004 onwards, data have been collected on a bi-annual basis. Thus, we
have data for only 18 years to perform our econometric/modeling analysis. The
sample size is too small to obtain sensible results from modeling analysis.
 T. Mahbub and J. Jongwanich

Table 1
Examples of determinants for a firm's decision to conduct FDI in the power sector.
Source: Authors' compilation
Category Variable Literature References Category Variable Literature References

A. Regulatory 1. Government commitment to contracts e.g. Refs. [19–21,28,29] 24. Foreign investors can buy shares locally or acquire a e.g. Ref. [53]
local company
2. Land acquisition/rent/lease of land e.g. Refs. [2,6,30,31] 25. Regulation on labor e.g. Refs. [42,43,49]
3. Tax exemption e.g. Refs. [30,32–34] 26. Price cap regulation e.g. Refs. [43,54]
4. Avoidance of double taxation e.g. Refs. [30,32] 27. Regulation on subsidy for consumers e.g. Refs. [43,55]
5. Protection of Foreign Investors Act (1980) e.g. Ref. [35] 28. Regulation on trade union e.g. Refs. [43,49]
6. Profit repatriation controls e.g. Refs. [30,36] B. Economic and 1. Economic growth and development e.g. Refs. [39,43,56]
Financial
7.Presence of government guarantee e.g. Refs. [19,20,37,38] 2. Gas transmission line e.g. Refs. [11,19,57]
8. Time and efficiency of staff to complete the procedure e.g. Refs. [39,40] 3. Government spending for infrastructure e.g. Refs. [2,58,59]
9. World-class security package e.g. Refs. [38,39,41,42], 4. Skilled labor e.g. Refs. [2,59]

181
10. Protection of property rights e.g. Refs. [19,21,43,44] 5. Financial facilities e.g. Refs. [19,20,60,61]
11. Quick allocation of work permits e.g. Refs. [30,32] 6. Credit facilities e.g. Refs. [19,41,43,61]
12. Approval of central bank for transferring capital e.g. Refs. [30,31,36]
13. Environmental regulations e.g. Refs. [38,45] C. Political 1. Coordination and collaboration between ministries e.g. Refs. [2,55,56]
14. Need for internationally accepted Environmental and Social Impact e.g. Refs. [46–48] 2. Accountability of public officials e.g. Refs. [19,30,60]
Assessment for large projects
15. Property registration e.g. Refs. [3,30] 3. Control of corruption e.g. Refs. [19–21]
16. Regulation on health, hygiene, and safety of workers e.g. Ref. [49] 4. Capacity to adapt policies e.g. Refs. [19,31,57]
17. Responsiveness of needs and time frame of investors e.g. Refs. [20,40] 5. Excessive bureaucracy and red tape e.g. Refs. [31,62]
18. Level of administrative competence e.g. Refs. [6,20,29,43] 6. Electoral process e.g. Refs. [63,64]
19. Construction permit e.g. Refs. [39,40,42,43] 7. Freedom of press e.g. Refs. [50,51,65]
20. Continuity and consistency of rules and processes e.g. Refs. [31,50,51] 8. Vested groups e.g. Refs. [37,43,63,66]
21. Bangladesh Arbitration Act 2001 e.g. Ref. [52] D. Societal 1. Citizen security and accountability e.g. Refs. [56,58]
22. Regulation on qualification of personnel who supervise construction e.g. Refs. [39,42] 2. Strengthening links between the citizen and the e.g. Refs. [57,60]
government
23. Regulation on ownership (wholly owned subsidiary/joint venture (JV)) e.g. Ref. [32]
Energy Strategy Reviews 24 (2019) 178–192
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

large (above 25 MW). In the wind category, only one company Table 2
(0–20 MW) was small. Respondent characteristics.
To gain insight on factors influencing FDI, 30 semi-structured one- Sample (N) Conventional power 20 80
plants
on-one in-depth interviews were conducted during December
2015–April 2016. Four target representative groups were chosen, in- Renewable 5 20
cluding private company personnel, government officials, multilateral
agencies, and academics. A purposive sampling technique was chosen Ownership Conventional power JV 11 44
Wholly Owned 9 36
for data collection. Examples of key questions to the respondents are: (i)
Renewable JV 3 12
what is the basic profile of your company; (ii) how important do you Consortium 2 8
think is FDI in Bangladesh's power sector; (iii) what are the strategic Capacity Conventional power 0–50 MW 2 8
factors that influenced you to make investments in the Bangladeshi 50–150 MW 8 32
> 150 MW 10 40
power sector? The study used grounded theory to analyze qualitative
Renewable Solar 5 KW-1 MW 0 0
data, using coding for concepts and themes for FDI [67]. The interviews 1–25 MW 2 8
were digitally recorded and, to increase quality, the interviewees were > 25 MW 2 8
given the option of reviewing the transcripts and amending them if Wind 0–20 MW 1 4
necessary. Then, we compiled detailed case-based memos to capture the 20–100 MW 0 0
> 100 MW 0 0
initial ideas and compare between the participants' accounts. This en-
Fuel Conventional power Gas 7 28
riched the data analysis and further guided the data collection. Fur- Liquid Fuel 5 16
thermore, this constant comparison between the participants' reflec- Dual Fuel 2 12
tions helped refine the concepts by identifying similarities, differences, Coal 6 24
trends, and patterns in the data, and come up with the appropriate and Renewables Wind 1 4
Solar 4 16
robust themes or FDI determinants [67]. Contract Period 0–5 years 7 28
To link quantitative data with the qualitative analysis, concurrent 5–10 years 0 0
triangulation was used. Equal weights were established for both 10–15 years 3 12
methods (i.e., qualitative and quantitative data collection). The ad- 15–20 years 5 20
20–25 years 10 40
vantage is that it produces well-validated and substantiated findings,
> 25 years 0 0
such as interpreting the statistical data with qualitative quotes for Position of respondent Power companies Chairperson 1 1.6
confirming or disconfirming the arguments. Additionally, this strategy Managing Director 3 4.8
helps in carrying out both forms of data collection (i.e., qualitative and Director 20 32.3
quantitative) at the same time, thus having a shorter data collection Manager 8 12.9
Government Secretary 4 6.5
period compared to the sequential approaches of qualitative data col- Director 15 24.2
lection. The limitation of this design is that it is sometimes difficult to Multilaterals Senior Energy experts 4 6.4
compare the results of the two analyses (qualitative and quantitative) if Academics 7 11.2
discrepancies arise in this process. However, this could be resolved by
additional data collection and, in our case, we have revisited the firms
for collecting additional data to confirm our arguments [68]. latter falling into the category of rental power groups. In the solar ca-
The questionnaire was developed in three phases. See the ques- tegory, the proportion is equally divided between large and medium
tionnaire in Appendix 1. First, the FDI determinants in the ques- sized firms, each accounting for 8%, while in wind energy, one FDI
tionnaire were primarily developed through 10 preliminary expert in- company (presently carrying out wind mapping for bankable data),
terviews from April to July 2015. This was then confirmed through a which has signed a contract and is under construction, is small. The
literature review.4 This offered a first-hand understanding of the area of contract period of the sample companies differ widely from 5 to 25
investigation and identified any missing gaps between theory and the years, with the rental power plants (not IPPs) having the shortest op-
actual ground conditions.5 Second, the quantitative questionnaire was erational life span in the range of 0–5 years, while the conventional and
pretested by six experts from the four stakeholder groups through pri- renewables IPPs have the longest, within a range of 10–25 years. The
mary reviews and suggestions. Finally, the questionnaire was improved majority of interviewees (i.e., 56%) are directors involved in policy-
by incorporating feedback from these respondents. The respondents making, research, and strategic investment decisions. Therefore, this
were asked to fill out a five-point Likert scale structured questionnaire helped us gain sufficient insight into the workings of FDI in the Ban-
[69] ranging from 1—“not at all important”—to 5—“extremely im- gladesh power sector.
portant.” The questionnaire was composed of three parts on firm in- For quantitative data analysis, descriptive statistics were used to
formation, determinants, and personal information. It investigated 46 compute the average scores and standard deviations. To facilitate data
factors from both literature review and expert interviews. analysis, the means were interpreted as follows: (i) not at all im-
Table 2 shows respondent characteristics. Among the sample FDI portant = 1.00–1.79; (ii) slightly important = 1.80–2.59; (iii) fairly
power companies, 80% are in conventional thermal power generation important = 2.60–3.39; (iv) very important = 3.40–4.19; and (v) ex-
and 20% in renewable energy. In conventional power, most companies tremely important = 4.20–5.00.7 One-way analysis of variance
are JVs, while 36% are wholly owned. In renewables, the majority are (ANOVA) and t-tests were then applied to analyze whether all de-
JVs and two firms are consortiums. In terms of capacity for conven- terminants were rated differently according to three firm-level char-
tional power plants 40% are large,6 32% medium, and 8% small, the acteristics for both conventional thermal power plants and renewables,
that is, (i) ownership (JV, wholly owned subsidiary, and consortium);
(ii) capacity (small, medium, and large); and (iii) contract period
4
Examples are provided in Table 1.
5
We identified two new variables namely, road network and male pre-
dominance, through the expert interviews. (footnote continued)
6
For conventional thermal power plants from the Bangladeshi power sector 20–100 MW medium, and above 100 MW large (source: selected interviews and
those with a capacity of 0–50 MW are small, 50–150 MW medium, and above Correspondence with personnel from the government and private sector,
150 MW large. In solar power, a capacity of 5 KW–1 MW is small, 1–25 MW January–March 2016).
7
medium, and above 25 MW large. In wind, a capacity of 0–20 MW is small, Range of means is calculated from standard deviations.

182
T. Mahbub and J. Jongwanich
Fig. 3. Mean scores of determinants categorized by area. Source: Authors' es-
timates.
(0–25) years. If the p-value is equal to or below 0.05, there was a sta-
tistically significant difference. Also note that adding to the literature
[19,20,51,56] on firm characteristics could influence FDIs in the power
sector. Therefore, we analyzed these determinants. In the ques-
tionnaire, we had three different characteristics of FDI (i.e., ownership,
capacity, and contract period).
5. Results
The results from the questionnaire data show MNEs do not
provide equal weight for the four areas of FDI determinants and char-
acteristics of power plants matter in determining the set of FDI
factors (Fig. 3).
The regulatory area is the most influential, followed by economic
and financial factors, political, and societal (Fig. 3). Within regulatory,
government commitment to contracts, which is rated at 4.52, land ac-
quisition/rent/lease of land (4.29), and tax exemption (4.24) are rated
as extremely important and found to be significant (Table 4). For eco-
nomic and finance, three factors are rated as the very important (score
above 4) (i.e., economic growth and development; gas transmission
line, and skilled labor). For political considerations, the coordination
and collaboration of ministries assumes the highest weight, with a score
of 4.11, followed by accountability of public officials (4.06) and control
of corruption (4.06). Finally, for societal factors, only the citizen se-
curity and accountability is rated as very important, with a rating of 4.
These factors are described in detail in Table 3.
5.1. Regulatory factors
5.1.1. Government's commitment to contracts
This factor is rated as the most influential in attracting FDI to the
Bangladeshi power sector from the regulatory category. All respondents
unanimously agreed that it represents the guiding rule for doing busi-
ness as a means to see contractual obligations honored, revenues se-
cured, and creating the confidence that investors' interests are pro-
tected. All respondents agreed that Bangladesh has set a good track
record with IPPs and there have not been any instances of payment
defaults per se. This is in line with the literature arguing that foreign
investors in developing countries would like to see the “rules of the
game” remain credible and not altered at the government's convenience
once they have made investment decisions based on such rules
[19,20,29,43]. For example, one respondent opined, “Our project is guar-
anteed by an Implementation Agreement from the government, which gives
183
Energy Strategy Reviews 24 (2019) 178–192
direct support to the project through various commitments, including pro-
tection against any changes in law or of government, and offers guaranteed
payment obligations. They cannot cancel the agreement. From the start of
IPPs since 1998, Bangladesh had no payment defaults to date.”
5.1.2. Land acquisition/rent/lease of land
Access to land is a major issue for setting up power plants in
Bangladesh, and this factor is rated as the second most important. In our
field research interviews, all interviewees responded that the cost,
availability, and difficulty in procuring land are some of the major
concerns when making investment choices in Bangladesh. Moreover,
there are other sensitive issues, such as resettlement and rehabilitation
of the affected people, who primarily depend on the agricultural land
for their livelihood, and costly litigation and ownership issues, as there
are multiple titles of land ownership, which makes the entire land ac-
quisition process costly, time consuming, and risky (see also [3,70]).
Additionally, when investors are successful in acquiring large tracts of
land in a suitable place, there are several pockets the landowners do not
want to give up and use them as a bargaining tool for raising prices,
thus creating additional costs for the investors. However, for some re-
spondents, this was not a major issue, as they have been provided with
lease land from the government due to their strong affiliations with the
political process or had the recourse to make available their own pri-
vate land to complement the land acquisition process.
5.1.3. Tax exemption
This factor is also significant in influencing FDI in the power sector.
In Bangladesh, power companies are exempt from corporate tax for 15
years. Apart from conventional thermal power plants, renewable com-
panies are also exempted from corporate income tax for 10 years. These
measures are part of the fiscal incentives given by the government to
draw large-scale private investment in this sector. Additionally, as the
future fuel mix would be heavily drawing on coal, the government has
also recently introduced incentives for coal-based power plants to come
under the provision of the 15-year tax break if these could bring their
operation online by June 2020 [71].
Most respondents, from both private companies and the govern-
ment, indicated that tax exemption is a key determinant to drawing FDI
to the power sector. Moreover, this incentive is helping the government
ensure a lower tariff from private companies, which helps for the
subsequent mitigation of losses for the off-taker when selling subsidized
power to end users. One respondent opined, “Bangladesh follows a fixed
price cap regime, where the tariff for IPPs is fixed for the entire contract
period and, on top of that, if we had to pay tax, it will squeeze our revenues
even more.”
5.2. Economic and financial
5.2.1. Economic growth and development
Bangladesh has experienced a robust and resilient economic growth
performance over the past decade. Its real gross domestic product grew
at a healthy rate of around 6% [30].
This factor is rated as very influential in attracting FDI in the power
sector. Both private and government respondents unanimously agreed
that, by any standards, the Bangladeshi economy has performed well.
Many respondents suggested the country is giving top priority to in-
frastructure development, including power with large capacity im-
provements having been achieved, largely from private sources, which
is helping draw foreign investment. Moreover, many also highlighted
Bangladesh's current sovereign rating by Moody's with a Ba3 stable
outlook, which is positive for foreign investors in the country [2,41].
5.2.2. Gas transmission line
This factor is the most important variable in the economic, in-
cluding infrastructure and financial, category. Natural gas is the pri-
mary source of fuel for power generation in Bangladesh. Most
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

Table 3
Mean scores and P-values of individual factors.
Source: Authors' estimates
a
Class Variable label Mean P-value Class Variable label Mean P-value

Regulatory Government's commitment to contracts 4.52 0.000 Regulatory (cont.) Foreign investors can buy shares 3.29 0.002
locally/acquire a local company
Land acquisition/rent/lease of land 4.29 0.000 Regulation on labor 3.18 0.000
Tax exemption 4.24 0.000 Price cap regulation 3.15 0.001
Avoidance of double taxation 4.19 0.000 Regulation on subsidy for consumers 2.40 0.000
Protection of Foreign Investors Act (1980) 4.18 0.000 Regulation on trade union 2.16 0.000
Profit repatriation controls 4.16 0.000 Economic (infrastructure Economic growth and development 4.15 0.000
and financial)
Presence of government guarantee 4.15 0.000 Gas transmission line 4.08 0.001
Time and efficiency of staff to complete the procedure 4.15 0.000 Skilled labor 4.06 0.000
World-class security package 4.13 0.000 Government spending for 3.95 0.003
infrastructure
Protection of property rights 4.10 0.000 Financial facilities 3.94 0.001
Quick allocation of work permits 4.08 0.000 Credit facilities 3.87 0.042
Approval of central bank for transferring capital 4.08 0.000 Road network 1.77 0.000
Environmental regulations 4.06 0.000 Political Coordination and collaboration 4.11 0.000
between ministries
Need for internationally accepted environmental and 4.06 0.000 Accountability of public officials 4.06 0.000
social impact assessment (ESIA) for large projects
Property registration 4.03 0.001 Control of corruption 4.06 0.000
Regulation on health, hygiene, and safety of workers 4.00 0.001 Capacity to adapt policies 3.97 0.002
Responsiveness of needs and timeframe of investors 3.98 0.001 Excessive bureaucracy and red tape 3.26 0.017
Level of administrative competence 3.97 0.002 Electoral process 3.06 0.000
Construction permit 3.92 0.011 Freedom of press 3.06 0.000
Continuity and consistency of rules and processes 3.92 0.002 Vested groups 2.77 0.000
Bangladesh Arbitration Act 2001 3.90 0.022 Societal Citizen security and accountability 3.90 0.000
Regulation on qualification of personnel who supervise 3.87 0.003 Strengthening links between citizens 3.35 0.023
construction and the government
Regulation on ownership (wholly owned subsidiary/ 3.39 0.036 Male predominance 1.90 0.012
joint venture)

Note: Only significant factors are reported in this table.

a
Note: A one-tailed hypothesis test was performed, and to interpret the results, the P-value was compared to the significance level, which in this case was P-value
≤ 0.05.

interviewed respondents rated this factor highly in considering the opportunity to move between locations and across projects as part of a
choice of fuel mix as part of their investment decision. Moreover, gas global learning initiative. However, some respondents argue that the
price is highly subsidized in the country, which is one sixteenth of the country still needs to improve worker quality, as it lacks adequate su-
international level [72]. This creates a proclivity to run power plants on pervisory and management skills, for which employees need to be hired
this cheaper and clean fossil fuel and have less greenhouse gas emis- from neighboring countries, especially semi-skilled and highly skilled
sions. workers. One respondent said, “Workers’ need to improve their skills. The
From our interviews, we found it is easier to get a wider source of competency of MBAs is very low. There is availability of skills and institu-
financing for such projects. One respondent opined, “The payment is faster tions in the country, but they are not up to the job and require training.”
for gas-based power projects and multilaterals generously lend for such
projects, with many plants running at 60% efficiency level.” Moreover, the
5.3. Political factors
government is planning to import liquefied natural gas (LNG), which
would be fed through the existing gas transmission pipelines with ad-
5.3.1. Coordination and collaboration between ministries
ditional pipelines to be built for feeding LNG, creating the opportunity
Most respondents identified this factor as the most crucial among
for investing in more in gas-based power projects in the future.
political factors to attract FDI inflows in the power sector. However,
Additionally, respondents also suggested that alongside LNG imports,
many private companies revealed that, in Bangladesh, there is still a
Bangladesh should increase its reserve gas ratio through accelerated
lack of effective coordination and collaboration among the different
exploration and development of new gas fields for production, aug-
line ministries and departments and other government agencies that
mentation, and optimization of recovery. The transportation and dis-
operationalize the power sector. For example, almost all respondents
tribution network would be expanded accordingly. Note that although
complained about the slow and uncoordinated services of the Board of
Bangladesh is rich in natural gas, the present reserves are depleting fast,
Investment (BOI),8 which is supposed to be a one stop shop to ensure a
having a current demand shortage of 600 million standard cubic feet
wide range of business set-ups and other facilitation services to foreign
per day (MMSCFD) due to low levels of exploration work and in-
investors, but due to a general lag of coordination among various
adequate transmission systems [73].
government agencies, processes get persistently delayed and become
cumbersome in the detriment of foreign companies. Moreover, at the
project implementation phase and also on the working level, investors
5.2.3. Skilled labor
face hurdles in expediting tasks from various line ministries or in the
Skilled labor is another variable that most respondents rated as a
grant of concessions for certain provisions already incorporated in po-
very important in attracting FDI into the power sector in Bangladesh.
licies.
From our interviews, there are skilled workers in the country, and
foreign firms can hire technicians and engineers from local universities
and colleges. Many companies retain them by providing better financial 8
Currently, the BOI has merged with the Privatization Commission to form a
packages and job training. Additionally, they give employees the new agency, named the Bangladesh Investment Development Authority (BIDA).

184
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

This issue is more serious on a macro level, impeding future project 5.4. Societal factors
development. For example, one respondent opined that, while working
on a 6000 MW new coal hub to be built in the island of Moheshkhali in For societal factors, only citizen security and accountability was
the southern part of the country, the company signed a JV with a ranked as a very important factor in affecting investor decisions to
government power company. The government intends to build several conduct FDI. In our interviews, most respondents expressed their ap-
large coal-based power plants on a public-private partnership basis. The prehension about the overall security (both life and goods) conditions
government initially planned to have each power plant to have their in the country. This may be attributed to the fact that the country's law
individual jetties. However, it later transpired that there should be one and order situation (for example, crime, theft, and other disorders) has
common jetty for sharing water utilities, water output, and other an- seriously deteriorated. Additionally, there have been kidnappings and
cillary facilities for all power companies. However, due to a lack of killings of foreign nationals. The most vivid representation of this
effective coordination among the various line ministries, which in this manifestation is the very recent terrorist attack conducted in the dip-
case were the Ministry of Transportation, Ministry of Shipping, and the lomatic enclave of the capital, where nine Italian and seven Japanese
Port Authority, no concrete development work has been initiated. More personnel were killed [76]. This incident has garnered wide-scale
FDI could enter the economy if this problem is resolved. global attention about the current law and order situation in the
country, and influenced the government to maximize security efforts for
combating global terrorism.
5.3.2. Accountability of public officials
Accountability of public officials was identified as another crucial
6. Effects of power plant characteristics
variable in attracting FDI. However, as in the case of coordination and
collaboration, many respondents believe that accountability of public
Interestingly, based on ANOVA and t-tests,9 our study shows that, in
officials still needs to improve (see also [74]. For example, one re-
Bangladesh, FDI determinants are influenced by firm characteristics of
spondent from a large multinational power company invoked that, in
power plants, including ownership (joint venture, wholly owned sub-
one specific competitive bidding for a large gas based power plant, the
sidiary, and consortium), firm size (small, medium, and large), and
bid process was conducted three times, since there was no initial re-
contract periods. In terms of ownership, there are 25 variables that
sponse from the bidders. Due to a lack of adequate response, the project
wholly owned firms rated to be more crucial than JVs in determining
was rebid for a second time, where the respondent company was the
FDI inflows. These variables are shown in Table 4. Based on statistic
sole bidder to participate. However, the project was not awarded. It is
values (i.e., both t- and p-values), differences in opinion between
to be mentioned that, according to the public procurement guidelines,
wholly owned firms and JVs are the highest in level of administrative
an evaluation should proceed and an award be made even if a single bid
competence, capacity to adapt policies, competition policy, foreign
is received and found technically and commercially responsive to the
technicians not subject to personal income tax for up to three years,
project requirements [75]. The third time, the project was awarded to a
workers’ insurance, wage and other returns, and land acquisition/rent/
sole local bidder having strong ties with political circles, in which the
lease of land.
respondent company did not participate.
For the level of administrative competence, wholly owned compa-
nies rank this factor more influential than JVs. As many wholly owned
companies are representatives of global multinationals, they would like
5.3.3. Control of corruption
to see stability and consistency when dealing with the local bureau-
All FDI firms from our interviews have agreed that corruption is a
cracy. They also expect their needs to be met with quick responses and
major issue that prevents foreign investors from participating in the
urgency, as they have a sense of standardization and expediency. In
Bangladesh's power sector. Irregularities and rent capture are con-
contrast, as JVs are more embedded in the local culture, they have a
sidered significant stumbling blocks at the procurement stage in the
higher comfort zone for adjustment within the local bureaucracy.
Bangladesh's power sector. For example, procurement irregularities
Additionally, they engage heavily in building personalized relationships
have resulted in persistent problems about procedures and transparency
among different spheres of government and employ informal con-
with the World Bank, especially when large projects with multilateral
tracting arrangements for obtaining priority. Therefore, level of ad-
involvement are bid.
ministrative competence becomes less crucial for JVs in Bangladesh's
It has been argued that, some, technical specifications of submitted
power sector.
bids when preferring a particular party are evaluated with less than
Regarding the capacity to adapt policies, wholly owned companies
vigorous scrutiny or are being doctored for bringing them in line with
give this factor a higher importance than JVs. For changes in govern-
project-specific bid criteria for conferring awards, while for others
ment policies, wholly owned companies have a faster response time,
overly rigorous scrutiny is applied for seeking grounds for forced dis-
review and adapt to these changes, and make the good use of them as a
qualification as to prevent them from proceeding to the final stages of
function of the subsidiary's internal policy framework for acting as good
the bid award. Additionally, projects are sometimes blocked at the final
corporate citizens in the host country. Conversely, JVs are not that fast
stage by rival factions or disaffected parties and are called for addi-
in responding to such changes, since they have some influence with the
tional retendering. These factional conflicts are common and temper
host government policies, and are likely to negotiate or manage a de-
the award of private power projects in Bangladesh, resulting in sig-
layed response in their favor for such changes.
nificant rent capture and corruption at the procurement stage, favoring
Competition policy is the third variable that wholly owned com-
particular sponsors by insiders who represent powerful party elites and
panies give higher weight to than JVs. This could be explained by the
the bureaucracy as to influence bids when awarding projects [74]. One
fact that the former would like to see a good level playing field through
respondent from a multilateral organization remarked, “I think the policy
competitive selection and award, while the JVs, who engage heavily in
and regulations are adequate to attract FDI in the energy sector. What I think
personalized and privileged relationships with the government, tend to
is missing is a transparent and competitive tendering process. I think com-
bypass the competitive selection process and engage in direct negotia-
petent foreign investors are hesitant to take part in IPPs because of the
tion with the government.
perception that the tender evaluation will not be objective and that some
The factor of Foreign technicians not subject to personal income tax
“preferred party” will win the contract.” Another respondent said, “There is
too much corruption in the sector. One tender is done three times. Re-
tendering is due to corruption. After the tender, they sell their award through 9
The questionnaire data for FDI determinants were used for conducting the
a company name change to some other party.” ANOVA and t-tests analyses.

185
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

Table 4
T-test and ANOVA analysis results.
Source: Authors' estimates
Variable Private ownership Firm size (Capacity) Contract period

T-value P-value F-value P-value F-value P-value

Competitive selection process 0.19 0.854 0.21 0.811 1.51 0.234

Responsiveness to needs and time frame of investors 0.57 0.571 0.56 0.580 1.53 0.228
Presence of government guarantees −2.64 0.014* 0.87 0.431 0.78 0.516
World-class security package −2.05 0.051 0.84 0.444 1.53 0.229
Government's commitment to contracts −2.38 0.025* 0.43 0.656 0.69 0.565
Construction permit −1.11 0.277 0.20 0.818 0.85 0.477
Time and efficiency of staff to complete the procedure −1.48 0.151 2.58 0.096 0.94 0.433
Liability insurance −2.03 0.053 0.18 0.839 1.13 0.353
Regulation on qualification of personnel who supervise construction 1.50 0.147 0.73 0.491 1.46 0.246
Tax exemption −3.34 0.003* 1.30 0.290 0.14 0.935
Price cap regulation 4.48 0.000* 1.66 0.211 1.39 0.265
Competition policy −4.34 0.000* 1.37 0.274 1.23 0.319
Protection of Foreign Investors Act (1980) −3.36 0.002* 1.55 0.232 1.16 0.344
Protection of property rights −3.94 0.001* 1.32 0.286 1.39 0.266
Profit repatriation controls −0.89 0.384 0.14 0.870 1.77 0.176
Environmental regulations −1.08 0.292 0.28 0.760 4.09 0.016*
Need for internationally accepted environmental and social impact assessment for large projects −2.88 0.008* 0.94 0.403 0.94 0.435
Level of administrative competence −5.14 0.000* 1.64 0.215 0.94 0.436
Continuity and consistency of rules and processes 1.09 0.285 0.47 0.631 1.43 0.254
Wage and other returns −3.70 0.001* 4.17 0.028* 3.49 0.029*
Workers' insurance −3.94 0.001* 0.78 0.470 1.67 0.197
Regulation on health, hygiene, and safety of workers −1.63 0.116 0.84 0.443 1.93 0.148
Land acquisition/rent/lease of land −3.69 0.001* 2.20 0.133 1.17 0.338
Property registration −2.94 0.007* 0.62 0.546 0.66 0.582
Exit policy −1.96 0.061 1.19 0.320 2.41 0.088
Foreign investors can participate in more than one project for prequalification of investors and/or tenders −2.22 0.036* 2.26 0.126 1.33 0.283
Foreign investors not obliged to sell shares through public issues −2.09 0.047* 0.62 0.547 0.99 0.410
Foreign technicians not subject to personal income tax for up to three years −4.01 0.000* 1.27 0.300 1.03 0.394
Avoidance of double taxation −1.52 0.140 1.19 0.323 0.09 0.966
Reinvestment of remittable dividend to be treated as new foreign investment 0.10 0.924 0.84 0.444 0.45 0.718
Quick allocation of work permits −1.51 0.144 0.89 0.422 0.46 0.714
Free flow of raw materials −2.07 0.049* 0.17 0.842 2.13 0.119
Approval of central bank for transferring capital −2.47 0.021* 0.73 0.494 2.74 0.062
Fast track procedure for small claims −0.10 0.919 0.88 0.429 1.68 0.195
Bangladesh Arbitration Act (2001) −3.65 0.001* 0.05 0.952 2.11 0.121
Democracy −0.67 0.508 0.15 0.865 0.75 0.532
Accountability of public officials −3.42 0.002* 0.89 0.425 1.49 0.238
Transparency in government policy making −1.91 0.068 0.42 0.664 1.55 0.223
Capacity to adapt policies −4.88 0.000* 0.73 0.492 0.67 0.576
Policy consistency and forward planning 0.50 0.621 2.42 0.110 4.99 0.007*
Coordination and collaboration between ministries −2.64 0.014* 0.19 0.827 0.60 0.623
Control of corruption −1.38 0.180 1.08 0.356 1.96 0.143
Economic growth and development 0.76 0.454 0.52 0.602 0.47 0.705
Good sovereign credit rating 0.00 1.000 0.88 0.427 1.15 0.347
Government spending for infrastructure 1.12 0.272 0.07 0.932 0.88 0.463
Labor costs 0.18 0.855 1.80 0.186 4.95 0.007*
Skilled labor −2.15 0.041* 1.58 0.227 1.74 0.181
Gas transmission line −2.45 0.021* 0.26 0.770 1.42 0.259
Real exchange rate −2.57 0.017* 1.48 0.248 0.35 0.791
Financial facilities −0.71 0.483 1.29 0.295 0.84 0.485
Credit facilities −1.15 0.260 4.64 0.020* 1.05 0.384
Citizen security and accountability −0.88 0.387 0.78 0.471 0.81 0.499

for up to three years is ranked higher for wholly owned companies than
JVs. This could be attributed to the fact that the former need to deploy
many foreign workers during the construction phase of the project due
to lack of sufficient knowledge and experience of skilled labor available
on the ground. It could also occur because the technology aspects of the
project are new and sophisticated, and specialized skills may not be
readily available locally. Therefore, receiving tax exemptions helps
wholly owned companies reduce costs in the initial stage. However, for
JVs, since the local counterpart has to otherwise pay regular taxes for
its own employed workforce for the assigned project, this does not bear
crucial importance.
For workers' insurance, wholly owned companies have good
workers’ insurance packages, which comprise standard emergency risk
and medical insurance. For JVs, these benefits are mixed from our in-
terview, as some have a good compensation package and some have
none, while some are in the way of developing such schemes by
creating a common fund for developing a standard compensation
package. Therefore, wholly owned companies rated this factor as more
crucial than JVs.
For wage and other returns, the reason that wholly owned compa-
nies rank this factor as more important than JVs could be explained in
that the former have global standardized polices aligned with local
market conditions. They use the market median as the base pay for
determining their wage policies. Conversely, for JVs, due to their or-
ientation for being local, in most companies, local partners control the
equity share, and they tend to cut costs and employ less resources for
employee development.
Land acquisition and rent or lease of land ranked higher for wholly
owned companies than JVs possibly because wholly owned companies
tend to face complex, cumbersome, and often-risky land acquisition

186
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

Table 5 number of projects operated globally or sell generators or machines,

Post-hoc analysis: capacity.
Source: Authors' estimates
Variable Mean difference
Wage and other returns Small Medium −0.36
Large 0.38
Medium Large 0.75
Credit facilities Small Medium −1.52
Large −1.18
Medium Large 0.34
processes. Conversely, for JVs, this is not a major issue, as they have
influential local partners who interact with the government both at the
central and local level for help in acquiring land with the government's
intervention or have their private land for setting up power projects.
Therefore, wholly owned companies pay attention to this factor sig-
nificantly more than JVs.
The second firm characteristic we considered is firm size. There are
two variables, namely wage and other returns and credit facilities, for
which firm size matters (Tables 4 and 5). Our p-values show that
medium companies tend to place a higher weight on wages and other
returns in influencing FDIs than large companies. From our interviews,
medium companies intend to optimize their workforce more than large
firms. They also focus more on productivity gains rather than workers’
size, so that they are more willing to offer a generous package and
better on the job training opportunities. Conversely, large companies
tend to economize costs and are more reasonable about the use of these
policies, if not being optimistically generous. For credit facilities,
medium-sized companies give higher weight to this factor than small-
sized companies in influencing FDI. For medium-sized companies,
especially for IPPs, it sometimes proves difficult to arrange large credits
for initially funding power projects, as they customarily lack the fi-
nancial wherewithal and strong balance sheet support or an established
track record for help arranging large credits. In contrast, small com-
panies, which constitute rental power plants, are either the affiliates of
global multinationals or global equipment manufacturers investing in
power plants, who depend on strong balance sheet financing and op-
erating cash flows generated from revenues coming from a significant
and have less recourse to large credits for setting up emergency power
plants for short-term contracts on a rental basis. Additionally, these
P-value companies use multiple sources of financing and have strong credit
support from their lenders.
0.657 For the contract period, the third firm characteristic we have con-
0.616
sidered, our ANOVA analysis shows that firms with a contract period of
0.021*
0.015* 0–5 years emphasize environmental regulations more than firms with a
0.060 contract period of 15–20 years (Table 4), due to the fact that the former
0.540 are mostly rental power plants either as direct representations of their
foreign parents, which ensure a higher level of global compliance on
environmental issues and performance standards, or are liquid-fuel-
based plants, which are subject to stringent local regulations and
monitoring standards due to their higher carbon emissions and the re-
lease of toxic pollutants. However, for the latter (i.e., 15–20 years)
these are all renewable power companies, which virtually have no
harmful impact on the environment and are subject to less stringent
monitoring standards than fossil fuel based power plants. Similarly,
firms with a contract period of 20–25 years ranked this factor more
influential than firms with a contract period of 15–20 years. This could
be accredited to the fact that most of the former run on gas, liquid fuel,
and some under construction would be using coal. Since these are
primarily fossil-fuel-based plants, they have to conform to stringent
environmental monitoring standards by the local environment au-
thority, which for coal is even higher due to its larger harmful effect on
the environment. However, for the latter (i.e., 15–20 years) since these
are renewable power companies they have fewer harmful effects on the
environment and are subject to less scrutiny and control regulations
than fossil-fuel-based plants.
Another variable rated significantly different by contract period is
wage and other returns. Our p-value shows that companies with a
contract period of 0–5 years rated this factor higher than those with
20–25 year contracts (Tables 4 and 6). This is because most the short-
term rental power companies tend to hire workers on a contractual
basis and, therefore, offer a more generous package for their retention.
Additionally, some are representatives of global multinationals, who
have otherwise higher standardized wage policies. However, for the
latter (i.e., 20–25 years) where the majority are JVs, these packages are
not overtly generous, as their local partners tend to economize costs

Table 6
Post-hoc analysis: contract period.
Source: Authors' estimates
Variable Mean difference P-value

Environmental regulations 0–5 years 10–15 years 0.16 0.981

15–20 years 1.36 0.014*
20–25 years 0.17 0.950
10–15 years 15–20 years 1.20 0.071
20–25 years 0.02 1.000
15–20 years 20–25 years −1.19 0.024*
Wage and other returns 0–5 years 10–15 years 0.44 0.554
15–20 years 0.64 0.241
20–25 years 0.83 0.018*
10–15 years 15–20 years 0.20 0.952
20–25 years 0.38 0.622
15–20 years 20–25 years 0.18 0.936
Policy consistency and forward planning 0–5 years 10–15 years −0.87 0.061
15–20 years −0.07 0.997
20–25 years −0.82 0.016*
10–15 years 15–20 years 0.80 0.162
20–25 years 0.05 0.999
15–20 years 20–25 years −0.75 0.093
Labor costs 0–5 years 10–15 years −0.98 0.023*
15–20 years 0.22 0.897
20–25 years −0.47 0.251
10–15 years 15–20 years 1.20 0.013*
20–25 years 0.51 0.348
15–20 years 20–25 years −0.69 0.121

187
T. Mahbub and J. Jongwanich
and their foreign partners would like to ensure that at least the
minimum standards as per the law are followed.
For policy consistency and forward planning, companies with a
contract period of 20–25 years rank this factor higher than companies
with a contract period of 0–5 years. This is because long-term contract
power companies would prefer aligning their operations with the
government's future policy direction and continuity and consistency of
present policies for the smooth running of their operations, as to be able
to plan long-term new capacity generation in line with these directives.
However, any retroactive changes in regulations undermine investors'
confidence and subject them to act cautiously [77]. However, this is not
so important for short-term rental power companies with a contract
period of 0–5 years, as they are temporary power providers and primed
to readily halt their business at the end of their contract periods without
having any long-term serious involvement in the sector.
For labor cost, companies with a contract period of 10–15 place
higher weight on this factor than companies with a contract period of
0–5 years and companies with a contract period of 15–20 years. This is
owed to the fact that companies with a contract period of 10–15 years
are primarily medium-sized companies and have a policy of econo-
mizing costs by working with the lowest number of labor force, while
boosting productivity. They would like to supplement their initial cost
of hiring with better on-the-job training and provide additional benefits
for higher productivity in the long run. Conversely, companies with a
0–5 years contract periods, which are rental power companies oper-
ating through global multinationals, view the labor cost in Bangladesh
much cheaper by regional standards, which has a nominal effect in their
total project costs in view of their wider experience in operating glob-
ally. Correspondingly, companies with a contract period of 15–20 years
are renewable power companies and operate with the least number of
workforce, with no more than 10 people on site at one time during the
operation phase of the project, and their labor costs constitute an in-
significant portion of total project costs. Table 6 shows results among
these four contract periods.
7. Conclusions and policy inferences
This paper investigated the key determinants of the investment
decision-making process of firms in conducting FDI in the power sector
using Bangladesh as a case study. Our results show that, on average, the
regulatory is the most influential area influencing investment decision
to conduct FDI in this sector, followed by economic (including infra-
structure) and finance, political, and social factors. In terms of in-
dividual factors, government's commitment to contracts is the most
influential in conducting FDI, followed by land acquisition and tax
exemptions, respectively. Policies related to gender such as male pre-
dominance and rights to freedom of association or collecting bargaining
such as trade unions are considered the least crucial factors for con-
ducting FDI.
Interestingly, the characteristics of firms matter in ranking the de-
terminants of a firm's decision to conduct FDI. Wholly owned compa-
nies tend to place a higher weight on several factors for conducting FDI
over JVs: level of administrative competence, capacity to adapt policies,
competition policy, foreign technicians not subject to personal income
tax for up to three years, workers' insurance, wage and other returns,
and land acquisition/rent/lease of land. Additionally, our results show
that, in terms of capacity, wage and other returns are more crucial for
medium-sized than large power companies, while credit facilities are
more important for medium-sized than small power companies.
Furthermore, environmental regulations matter more for short-term
rental power companies with a contract period of 0–5 years and 20–25
years long-term contracts than for renewable power companies with a
188
Energy Strategy Reviews 24 (2019) 178–192
contract period of 15–20 years. Similarly, wage and other returns bear
more significance for short-term rental power companies than those
with a contract period of 20–25 years. Policy consistency and forward
planning is more important for companies with a contract period of
20–25 years than for those with a contract period of 0–5 years. Finally,
labor costs bear more relevance for 10–15 years contract power com-
panies than 0–5 years rental power plants and also for 15–20 years
renewable power companies.
To attract sustainable FDI in the power sector there are four areas
that need to be strengthened, namely land acquisition, government
procurement, infrastructure, and citizen security and accountability. As
acquiring land is a perennial problem for foreign investors investing in
the power sector and it is difficult to find large tracts of land at suitable
locations close to the government's power evacuation infrastructure,
the government should contemplate setting power hubs at different
locations, which would be providing the integrated infrastructure for
setting up future power plants. Additionally, the government should
also lease land to the private power companies for locating in these
specialized zones as a long-term solution to this problem.
For procurement, there is a need for a transparent and competitive
selection process, which would ensure an objective evaluation criterion
that meets the best technical and financial responsiveness of projects
free from vested group interests. In this regard, the government should
also stop nurturing unsolicited offers, which raise the suspicion of
transparency, accountability, and consistency in the procurement pro-
cess. Moreover, for attracting large IPPs, there is a need for early as-
sessment of market attractiveness of projects, gauge potential level of
interests from serious bidders and financing agencies, devise suitable
risk sharing arrangements in early stages of projects should any un-
foreseen contingencies arise such as shortage of primary fuel supply,
and stick to the original plans and technical configurations of projects
for attracting large IPPs.
For infrastructure, priority to explore both onshore and offshore gas
fields as more gas becomes available through exploration and devel-
opment works should be permitted, along with the concomitant ex-
pansion of the gas transmission network for acquiring a regional bal-
ance of primary energy supply and the setting up of additional gas
based power plants in the country. Further, since Bangladesh is vul-
nerable to the effects of global warming, to reduce its dependence on
the fast depleting resources of fossil fuels, it should exploit its ample
reserves of wind and solar energy and introduce generous feed-in tariff
policies, not currently in place, that would attract scalable renewable
energy projects by global renewable IPP developers and eliminate the
need for incentives and subsidies for promotion of renewables to sustain
long-term development.
Finally, citizen security and accountability needs to be improved.
This entails fundamental institutional changes of the working culture
and attitudes of the law enforcement agencies in the country to make
them more accountable to the public. In this regard, there should be
more community-oriented law enforcement, including community po-
licing, ensure in crisis situations security actors are professional, ac-
countable and respect human rights, early warning and capacity
building to deal with conflicts and terrorist activities, information ex-
changes amongst agencies (i.e., law enforcement and intelligence)
and the overall participation of civil society to strengthen the rule of
law.
As Bangladesh plans to transit from a single-buyer model to an open
market system in the future as the market matures, future research
could focus on how new FDI should be directed into this sector and the
changing dynamics of market competition that such a system would
unfold for private power producers.
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

Acknowledgements Ahmad Syahrani Bin Sulaiman, the General Manager of two pioneering
FDI power companies in Bangladesh for the insightful discussions and
We would like to thank all survey respondents and interviewees useful comments that enriched this paper.
who participated in this study. Further, a special note of thanks to Mr.

Appendix 1. Part II. Factors/determinants influencing FDI decision-making in the Bangladesh power sector

Please indicate ☑ to what extent the factors influenced your firm to make investment decision in the Bangladesh power sector. Please choose the
most appropriate level ranging from 1 - “not at all important” – to 5 - “extremely important.”

No. Factors (1) (2) (3) (4) (5)

Not at all important Slightly Fairly Very Extremely important
important important important

1. Regulatory
Investment Process
1. Competitive selection process
2. Enforcement of contract
3. Responsiveness of needs and time frame of investors
4. Presence of government guarantee
5. World-class security package
6. Government's commitment to contracts
7. Power and Energy Fast Supply Enhancement Act (2010)
8. No international benchmark for tariff setting

No. Factors (1) (2) (3) (4) (5)

Not at all impor- Slightly Fairly Very Extremely impor-
tant important important important tant

Establishment

1. Construction permit
2. Time and efficiency of staff to complete the procedure
3. Liability insurance
4. Regulation on qualification of personnel who supervise construction

Revenue risks/controls
1. Tax exemption
2. Termination of contracts without compensation to foreign stakeholders
3. Price cap regulation
4. Regulation on subsidy for consumers
Regulatory risks and controls
1. Competition policy
2. Regulation on ownership (Wholly owned subsidiary/JVs)
3. Protection of Foreign investors Act (1980)
4. Long approval process of IPPs
5. Protection of property rights
6. Profit repatriation controls
7. Environmental regulations
8. Need for internationally accepted Environmental and Social Impact Assessment (ESIA) for
large projects

Government and legislative processes

1. Level of administrative competence
2. Continuity and consistency of rules and processes

No. Factors (1) (2) (3) (4) (5)

Not at all im- Slightly im- Fairly impor- Very impor- Extremely im-
portant portant tant tant portant

Labor market
1. Wage and other returns
2. Workers' insurance
3. Employment condition/turnover
4. Conduct towards female workers
5. Regulation on trade union
6. Regulation on health, hygiene and safety of workers

189
T. Mahbub and J. Jongwanich Energy Strategy Reviews 24 (2019) 178–192

Foreign investment
1. Land acquisition/rent/lease of land
2. Property registration
3. Tax/rebate scheme
4. Exit policy (for large projects five to seven years) For smaller projects after two years)
5. Foreign investors can participate in more than one project for prequalification of
investors and/or tenders
6. Foreign investors are not obliged to sell share through public issues
7. Foreign investors can buy shares locally/acquire a local company
8. Foreign technicians are not subject to personal income tax for upto three years
9. Avoidance of double taxation
10. Foreign investors when investing their retained earnings/dividends locally, will be
considered as new investment
11. Quick allocation of work permits
International trade
1. Free trade across border
2. Free flow of raw materials

No. Factors (1) (2) (3) (4) (5)

Not at all Slightly important Fairly important Very important Extremely important
important

Financial institutions
1. Approval of central bank for transferring capital
Judicial structure
1. Fast track procedure for small claims
2. Commercial arbitration governed by a consolidated law or chapter of the
applicable code of civil procedure (Bangladesh Arbitration Act 2001)
2. Political
Voice and accountability
1. Democracy
2. Vested groups
3. Accountability of public officials
4. Civil liberties
5. Electoral process
6. Transparency in government policy making
7. Freedom of press
8. Violence and terrorism
Government effectiveness in implementing policies
1. Capacity to adapt policies
2. Policy consistency and forward planning
3. Political interferences
4. Excessive bureaucracy and red tape
5. Coordination and collaboration between ministries
6. Control of corruption
3. Economic and financial
Economic factors
Growth and income
1. Economic growth and development
2. Good investment credit rating by Moody's
Government side
1. Government spending for infrastructure
2. Government debts
No. Factors (1) (2) (3) (4) (5)
Not at all Slightly important Fairly important Very important Extremely important
important
Labor
1. Labor costs
2. Human capital/skilled labor
Infrastructure
1. Gas transmission line
2. Deep seaport
3. Domestic waterway
4. Railroad
5. Coal and LNG terminal
6. Bulk oil terminal
7. Natural resources
8. Others
Road network

Prices
1. Inflation
2. Real exchange rate

190
T. Mahbub and J. Jongwanich
Financial
1. Financial facilities
2. Credit facilities
4. Societal
Inclusion
1. Others
Male predominance
Cohesion
1. Strengthening links between citizens and the government and promote more
accountable government structures
Resilience
1. Resistance to natural resource extraction (like coal, oil or gas)
2. Citizen security and accountability
References
[1] United Nations, United Nations General Assembly Declares 2014-2024 Decade of
Sustainable Energy for All, (2012) http://www.un.org/press/en/2012/ga11333.
doc.htm accessed 12.6.16.
[2] Government of Bangladesh, 7th Five Year Plan, FY 2016 – FY 2020, Accelerating
Growth, Empowering Citizens. http://www.plancomm.gov.bd/wp-content/
uploads/2015/10/7th_FYP_18_02_2016.pdf, (accessed 9.2.16).
[3] UNCTAD, Investment policy review, http://unctad.org/en/PublicationsLibrary/
diaepcb2013d4_en.pdf, (2013) accessed 8.9.16.
[4] F. Khatun, M. Ahamad, Foreign direct investment in the energy and power sector in
Bangladesh: implications for economic growth, Renew. Sustain. Energy Rev. 52
(2015) 1369–1377.
[5] Bangladesh Bank, Foreign direct investment (FDI) in Bangladesh, Survey Report,
Dhaka, Bangladesh, January-June, 2016.
[6] A.R. Keeley, K. Matsumoto, Investors' perspective on determinants of foreign direct
investment in wind and solar energy in developing economies-Review and expert
opinions, J. Clean. Prod. 179 (2018) 132–142.
[7] R.B. Johnson, A.J. Onwuegbuzie, Mixed methods research: a research paradigm
whose time has come, Educ. Res. 33 (2004) 14–26.
[8] Q. Alam, M.E. Miah, R.F.I. Smith, The Impact of Poor Governance on Foreign Direct
Investment: the Bangladesh Experience, Presented to the Network of Asia-Pacific
Schools and Institutes of Public Administration and Governance (NAPSIPAG)
Annual Conference 2005, PRC, Beijing, 2005.
[9] W.I. Mondal, Foreign direct investment in Bangladesh: an analysis of perspective
investors, Stud. Econ. Finance 21 (2003) 105–115.
[10] M.A. Rayhan, Foreign Direct Investment in Bangladesh: Problems and Prospects,
(2009) http://www.asaub.edu.bd/data/asaubreview/v3n2sl8.pdf accessed
23.4.15.
[11] PSMP, The Study for Master Plan on Coal Power Development in the People's
Republic of Bangladesh, (2010) http://www.bpdb.gov.bd/download/PSMP/
PSMP2010.pdf accessed 12.04.15.
[12] Ministry of Power, Energy and Mineral Resources, Government of the People’s
Republic of Bangladesh, 2016.
[13] Ministry of Finance, Bangladesh Economic Review, (2015) http://www.mof.gov.
bd/en/index.php?option=com_content&view=article&id=340&Itemid=1 2015
(accessed 9.7.15.
[14] G.M.K. Alam, Strategy for Infrastructure Sector: Background Paper for the Seventh
Five Year Plan, (2015) http://www.plancomm.gov.bd/wp-content/uploads/2015/
02/10_Strategy-for-Infrastructure-Development.pdf accessed 7.1.16.
[15] A. Boateng, X. Hua, S. Nisar, J. Wu, Examining the determinants of inward FDI:
evidence from Norway, Econ. Modell. 47 (2015) 118–127.
[16] M.E. Sanchez-Martin, R. de Arce, G. Escribano, Do changes in the rules of the game
affect FDI flows in Latin America? A look at the macroeconomic, institutional and
regional integration determinants of FDI, Eur. J. Political Econ. 34 (2014) 279–299.
[17] B.K. Kinuthia, S.M. Murshed, FDI determinants: Kenya and Malaysia compared, J.
Policy Model. 37 (2015) 388–400.
[18] M.M. Stack, G. Ravishankar, E. Pentecost, Foreign direct investment in the eastern
european countries: determinants and performance, Struct. Change Econ. Dynam.
41 (2017) 86–97.
[19] E. Woodhouse, The obsolescing bargain redux: foreign investment in the electric
power sector in developing countries, J. Int. Law Pract. 38 (2006) 121–219.
[20] R. Lamech, K. Saeed, What International Investors Look for when Investing in
Developing Countries, World Bank, Washington D.C., 2003.
[21] M. Bergara, W. Henisz, P. Spiller, Political institutions and electric utility invest-
ment: a cross-nation analysis, Calif. Manag. Rev. 40 (1998) 18–35.
[22] J.H. Dunning, Trade, location of economic activity and the MNE: a search for an
eclectic approach, in: B. Ohlin, P.-O. Hesselborn, P.M. Wijkman (Eds.),
International Allocation of Economic Activity, Macmillan, London, 1977, pp.
395–418.
[23] J.H. Dunning, S.M. Lundan, Multinational Enterprise and the Global Economy,
second ed., Edward Elgar Publishing Ltd., Massachusetts, 2008.
[24] T. Kostova, S. Zaheer, Organizational legitimacy under conditions of complexity:
the case of the multinational enterprise, Acad. Manag. Rev. 24 (1999) 64–81.
[25] R. Hoskisson, L. Eden, C.M. Lau, M. Wright, Strategies in emerging economies,
Acad. Manag. J. 43 (2000) 249–267.
191
Energy Strategy Reviews 24 (2019) 178–192
[26] J.H. Dunning, Comments on dragon multinationals: new players in 21st century
globalization, Asia, J. Manag. 23 (2006) 139–141.
[27] J.H. Dunning, S. Lundan, Institutions and OLI paradigm of the multinational en-
terprise, Asia, Pac. J. Manage. 25 (2008) 573–593.
[28] M. Bell, Regulation in developing countries is different: avoiding negotiation, re-
negotiation and frustration, Energy Policy 31 (2003) 299–305.
[29] J. Stern, S. Holder, Regulatory governance: criteria for assessing the performance of
regulatory systems: an application to infrastructure industries in the developing
countries of Asia, Util. Pol. 8 (1999) 33–50.
[30] S. Kathuria, M.M. Maluache, Strengthening Competitiveness in Bangladesh-
Thematic Assessment, World Bank, Washington D.C., 2016.
[31] A. Singh, Policy Environment and Regulatory Reforms for Private and Foreign
Investment in Developing Countries: A Case of the Indian Power Sector, (2007)
https://www.adb.org/sites/default/files/publication/156702/adbi-dp64.pdf ac-
cessed 16.4.15.
[32] MPEMR, http://powerdivision.portal.gov.bd/sites/default/files/files/
powerdivision.portal.gov.bd/page/f6d0e100_e2d8_47e7_b7cd_e292ea6395d3/1.
%20PSEPGPB.pdf, (2004) accessed 23.03.15.
[33] V. Kathuria, P. Ray, R. Bhangaonkar, FDI (foreign direct investment) in wind energy
sector in India: testing the effectiveness of state policies using panel data, Energy 80
(2015) 190–202.
[34] N. Wamukonya, Power sector reform in developing countries: mismatched agendas,
Energy Policy 31 (2003) 1273–1289.
[35] Justice Ministry of Law, Parliamentary Affairs, The foreign investment (promotion
and protection) act, http://bdlaws.minlaw.gov.bd/pdf_part.php?act_name=&vol=
&id=597, (1980) accessed 24.03.15.
[36] Bangladesh Bank, Guidelines for Foreign Exchange Transactions, (2009) https://
www.bb.org.bd/openpdf.php accessed 8.9.15.
[37] J.M. Fraser, Lessons from the Independent Private Power Experience in Pakistan,
(2005) http://documents.worldbank.org/curated/en/729661468285358780/
Lessons-from-the-independent-private-power-experience-in-Pakistan accessed
24.3.15.
[38] T. Lefevre, J. Todoc, IPPs in APEC Economies: Issues and Trends, (2000) http://
www.egcfe.ewg.apec.org/publications/proceedings/CoalFlow/ThaiSeminar_2000/
T_vre_all.pdf accessed 3.9.15.
[39] R.T. Crow, Foreign Direct Investment in New Electricity Generating Capacity in
Developing Asia: Stakeholders, Risks, and the Search for a New Paradigm, (2001)
https://fsi.stanford.edu/sites/default/files/Crow.pdf accessed 5.3.15.
[40] S. Peppiatt, Introduction to power station project financing, Berk. J. Int. Law 13
(1995) 46–64.
[41] M. Mukherjee, K.V. Pratap, The Impact of the Global Financial Crisis on Investments
in South Asia's Electric Power Infrastructure: the Experience of India, Pakistan, and
Bangladesh, World Bank, Washington D.C., 2010 Report No. 56849-SAS.
[42] World Bank and USAID, Submissions and Evaluation of Proposals for Private Power
Generation Projects in Developing Countries, (1994) http://pdf.usaid.gov/pdf_
docs/PNABY125.pdf accessed 24.8.15.
[43] J.E. Beasant-Jones, Reforming Power Market in Developing Countries: what Have
We Learned? World Bank, Washington D.C., 2006.
[44] S.M. Sirin, Foreign direct investments (FDIs) in Turkish power sector: a discussion
on investments, opportunities and risks, Renew. Sustain. Energy Rev. 78 (2017)
1367–1377.
[45] Y. Mulugetta, N. Montajit, T. Jackson, Power sector scenarios for Thailand: an ex-
ploratory analysis, Energy Policy 35 (2007) 3256–3269.
[46] ADB, Environmental Assessment Guidelines, (2003) https://www.adb.org/sites/
default/files/institutional-document/32635/files/environmental-assessment-
guidelines.pdf accessed 24.01.15.
[47] IFC, International finance corporation’s guidance notes, Performance Standards on
Environmental and Social Sustainability, (2012) http://www.ifc.org/wps/wcm/
connect/efdaaa8043649142947696d3e9bda932/Guidance+Notes+to
+Performance+Standards+on+Environmental+and+Social+Sustainability.
pdf?MOD=AJPERES accessed 17.10.15.
[48] World Bank, Environmental and Social Management Framework (ESMF), (2015)
http://documents.worldbank.org/curated/en/976181468013852677/pdf/
E47770V10REVIS00Box391418B00PUBLIC0.pdf accessed 23.1.16.
[49] Ministry of Labour and Employment, Bangladesh Labour Act 2006, (2015) http://
www.mole.gov.bd/site/view/legislative_information/Acts-%E2%80%8D&-Rules
23.3.15.
T. Mahbub and J. Jongwanich
[50] W.J. Henisz, B.A. Zelner, The Political Economy of Private Electricity Provision in
Southeast Asia, (2001) http://d1c25a6gwz7q5e.cloudfront.net/papers/1256.pdf
accessed 12.6.16.
[51] P.Y. Woo, China's Electricity Power Market: the Rise and Fall of IPPs, (2005)
https://pesd.fsi.stanford.edu/sites/default/files/ChinaIPPs.pdf accessed 25.3.15.
[52] A.F.M. Maniruzzaman, The new law of international commercial arbitration in
Bangladesh: a comparative perspective, Am. Rev. Int. Arbitrat. 14 (2003) 139–203.
[53] United Nations, An Investment Guide to Bangladesh: Opportunities and Conditions,
(2000) http://unctad.org/en/Docs/poiteiitm29.en.pdf accessed 4.9.15.
[54] D. Parker, C. Kirkpatrick, Regulating prices and profits in utility industries in low
income economies: rate of return, price cap or sliding-scale regulation? Int. J. Public
Sect. Manag. 3 (2005) 241–255.
[55] A.K. Sharma, E. Vohra, Foreign direct investment in the electricity sector: the Indian
perspective, Electr. J. 21 (2008) 63–79.
[56] P.M. Lamb, The Indian Electricity Market: Country Study and Investment Context,
(2005) http://pesd.fsi.stanford.edu/sites/default/files/India_Country_Study__
UPDATE.pdf accessed 25.03.15.
[57] P.L. Joskow, Regulatory Priorities for Reforming Infrastructure Sectors in
Developing Countries, Presented to the Annual World Bank Conference on
Development Economies, (1998) Washington, D.C..
[58] A. Eberhard, K.N. Gratwick, IPPs in Sub-saharan Africa: Determinants of Success,
(2008) http://siteresources.worldbank.org/AFRICAEXT/Resources/258643-
1271798012256/Africa_IPP.pdf accessed 4.10.15.
[59] C. Kirkpatrick, D. Parker, Y.F. Zhang, Foreign direct investment in infrastructure in
developing countries: does regulation make a difference, Transnatl. Corp. 15 (2006)
144–171.
[60] J.H. Williams, R. Ghanadan, Electricity reform in developing and transition coun-
tries: a reappraisal, Energy 31 (2006) 815–844.
[61] J.P. Gupta, A.K. Sravat, Development and project financing of private power pro-
jects in developing countries: a case study of India, Int. J. Proj. Manag. 16 (1998)
99–105.
[62] Z. Ahmed, Electricity crisis for Bangladesh: result of organizational inefficiency?
Energy Environ. Res. 1 (2011) 12–23.
[63] W. Henisz, B. Zelner, Legitimacy, interest group pressures and change in emergent
institutions: the case of foreign investors and host country governments, Acad.
Manag. Rev. 30 (2005) 361–382.
[64] J. Urpelainen, J. Yang, Policy reform and the problem of private investment: evi-
dence from the power sector, J. Policy Anal. Manag. 36 (2017) 38–64.
[65] M. Pournarakis, N.C. Varsakelis, Institutions, internationalization and FDI: the case
192
Energy Strategy Reviews 24 (2019) 178–192
of economies in transition, Transnatl. Corp. 13 (2004) 78–94.
[66] G. Holburn, B. Zelner, Political capabilities, policy risk and international investment
strategy: evidence from the global electric power generation industry, Strat. Manag.
J. 31 (2010) 1290–1315.
[67] J.W. Creswell, Qualitative Inquiry and Research Design: Choosing Among Five
Approaches, second ed., Sage Publications, California, 2007.
[68] J.W. Creswell, V.L. Plano Clark, M.L. Gutman, W.E. Hanson, Advanced mixed
methods research designs, in: A. Tashakkori, C. Teddlie (Eds.), Handbook on Mixed
Methods in the Behavioral and Social Sciences, Sage Publications, California, 2003,
pp. 209–240.
[69] U. Sekaran, Research Methods for Business: A Skill-Building Approach, third ed.,
John Wiley and Sons, New York, 2000.
[70] M. Hossain, Improving Land Administration and Management in Bangladesh,
(2015) http://www.plancomm.gov.bd/wp-content/uploads/2015/02/4_
Improving-Land-Administration-and-Mangement.pdf accessed 15.2.15.
[71] Bangladesh NBR, Exemption of Income Tax on Private Power Generation Plant,
(2013) http://www.nbr.gov.bd/contents/sro/383.pdf accessed 23.3.15.
[72] JICA, Survey on Power System Master Plan (Draft Final Report), (2016) http://
www.powercell.gov.bd/site/page/b93738b7-c6d2-4bcc-a7cd-298cbb91e6b4 ac-
cessed 15.6.16.
[73] World Bank, International Development Association Project Appraisal Document on
a Proposed Credit in the Amount of SDR 155.4 Million (US$ 217 Million Equivalent)
to the People's Republic of Bangladesh for the Ghorashal Unit 4 Repowering Project,
(2015) http://documents.worldbank.org/curated/en/569211468196182901/pdf/
PAD1422-PAD-P128012-IDA-R2015-0302-1-Box393264B-OUO-9.pdf accessed
9.7.16.
[74] M. Khan, T. Riley, C. Wescott, Public-private Partnerships in Bangladesh's Power
Sector: Risks and Opportunities, (2012) http://documents.worldbank.org/curated/
en/550271468209052051/pdf/860780WP0Bangl00Box382147B00PUBLIC0.pdf
accessed 7.8.16.
[75] GOB, The Public Procurement Rules, (2008) http://www.btcl.com.bd/files/img/
act/PPR_Public-Procurement-Rules-2008-English.pdf 2008 (accessed 15.6.16.
[76] Tharoor, American Is Among 20 Dead in Terrorist Attack in Bangladesh, (2016) The
Washington Post https://www.washingtonpost.com/news/worldviews/wp/2016/
07/01/terror-attack-in-bangladeshs-capital-should-surprise-no-one/?utm_term=.
7ac0b138dfd2 accessed 3.7.16.
[77] IEA, World Energy Investment Outlook, https://www.iea.org/publications/
freepublications/publication/WEIO2014.pdf, (2014) accessed 5.11.15.