Bangladesh power, energy sectors struggle with mounting dues

This is as per media reports, which added state minister for Power, Energy, and Mineral Resources, Nasrul Hamid emphasised the need for $1 billion monthly to meet payment obligations, citing a scarcity of dollars from Bangladesh Bank.

To address the crisis, a sovereign bond will be issued to commercial banks to pay Independent Power Producers (IPPs), with prominent banks already assigned for this purpose.

The government has introduced special bonds through Bangladesh Bank, initially worth Taka 12,000 crore, securing Taka 20.62 billion to clear outstanding liabilities to private power plants, reducing the outstanding bills to Taka 422.3 billion.

However, the Power Development Board (PDB) also owes Taka 25,000 crore to private power plants and Taka 8,000 crore to Petrobangla, the government-owned national gas company of Bangladesh.

Significant dues to foreign companies like Adani, Chevron, and Bangladesh Petroleum Corporation further exacerbate the situation.

Despite a history of payments, mounting debts are eroding confidence among energy suppliers, leading to operational issues and fuel shortages, contributing to load shedding.

Import dependence and a dollar crisis pose additional challenges, with the sector requiring $12 billion annually even if the government aims to pay outstanding bills to private power producers in local currency, but disagreements persist over the exchange rate.

The Bangladesh Power Development Board (BPDB) faces a daily shortfall of $33 million to meet payment obligations while the government provides subsidies to cover the gap between production costs and selling prices.

The BPDB is said to have incurred a staggering loss of Taka 47,788.17 crore despite revenues of Taka 50,858.25 crore.

ALCHEMPro News Desk (DR)