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Dhaka Wednesday,  Oct 4, 2023

Govt Paying $320m A Week For Power, Energy

Shamim Jahangir

The government started a disbursement of $320 million per week to pay outstanding power bills and ensure power and energy supply.

The disbursement is happening each four days in a week. It means that the government will pay around $1,280 million per month for power and energy in a bid to keep the economy running.

“We are receiving $80 million per day for power and energy as the Prime Minister instructed this early this month,” State Minister for Power and Energy Nasrul Hamid told the daily sun.
Of the amount, $50-60 million is being given to the Power Division daily while another $20 million goes to the Energy and Mineral Resources Division to pay the outstanding bills, current bills and bear other expenses.

“I have received around $25 million last week to pay outstanding bills of electricity and coal import,” Engr. Sayeed Akram Ullah, Managing Director of Bangladesh-India Friendship Power Company Ltd (BIFPCL), told the on Thursday.

He said that the company was now concentrating on opening letters of credit (LC’s) to import coal for smooth production of the electricity. “Banks seek cash payments to open the LC’s,” he said.

Not only the Rampal Power Plant but also other public and private sector plants as well as LNG and petroleum fuel suppliers are also receiving money to pay outstanding bills on priority basis after the Prime Minister’s instructions to the Ministry of Finance.

During a presentation early this month, the Power Division sought a substantial sum of $5.921 billion to ensure uninterrupted electricity supply for the fiscal year 2023-24.

The sought-after funds are earmarked for diverse expenditures, including the purchase of electricity from rental, quick rental, and Independent Power Producers (IPPs), as well as for electricity imports from India, power generated from 1000 diesel-based plants, repayment of Export Credit Agency (ECA) funded projects, and payments for long-term service agreement (LTSA) based power plants in the public sector.
According to official sources, there are outstanding arrears amounting to $475 million for electricity imports in the fiscal year 2022-23.

The Power Division anticipates needing an additional $1,755.24 million in the next fiscal year to maintain electricity imports. These costs may fluctuate depending on the global fuel market.

In addition, the arrears of IPPs and rental power plants have been reduced to $890 million from $1.8 billion. An estimated additional $253 million will be required in the next fiscal year for IPPs and rental power.

BPDB will need approximately $1,513.09 million to obtain full-load electricity from these coal-fired power projects, which are joint ventures. One of the projects is halted due to a coal crisis, while the other has experienced significant production declines.

Furthermore, there is an outstanding debt of $161.83 million for producing electricity from costly, diesel-fired power plants, with the per-kilowatt tariff being Tk 36.43, of which Tk 18.31 is the fuel cost.

Now, the ministry ordered the shut-down of diesel-fired plants and to make a list of age-old power plants to close in phases.

Bangladesh Power Development Board (BPDB) did not repay $73.20 million under the ECA-funded projects, and another $146.40 million will be needed for payment in the next fiscal year.

Payments for BPDB’s power plants also remain unpaid at $14.04 million for this fiscal year, with an expected payment of $28.08 million due next year.

Earlier, Power Division Senior Secretary Md Habibur Rahman, in a conversation with the Daily Sun, mentioned that approximately $4 billion will be needed by January 2024 to ensure uninterrupted power.

Furthermore, Bangladesh Independent Power Producers Association (BIPPA) said they are still awaiting Tk 170 billion in arrears.

the daily sun


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