BM Desk : The temporary administration quadrupled the state subsidy to settle the past-due payments to private-sector electricity producers, resulting in a clean sheet up to April on massive residual arrears costing Tk 600 billion, according to officials. On Friday, the government announced that it has increased the power-sector subsidy from Tk 360 billion in the original budget for the outgoing fiscal year (FY) 2024-25 to Tk 620 billion in order to pay all of the much-discussed capacity charges and electricity bills.
“We have disbursed approximately Tk600 billion in electricity subsidies to address the outstanding payments owed to independent power producers (IPPs) and private-sector rental,” states an official from the Ministry of Finance (MoF). He further mentions, “We will clear the remaining dues promptly after we collect the bills for the last two months of the current fiscal year (FY) 2024-25,” alluding to the contingency measures designed to avert any major power shortages. The MoF routinely assesses power supply and other invoices from the Bangladesh Power Development Board (BPDB) prior to disbursing the necessary funds, in accordance with established protocols. With a substantial subsidy included in the revised budget, the government of Bangladesh has received essential relief, having already addressed several overdue payments.
All 133 private and public-sector power plants throughout Bangladesh possess a total generation capacity of nearly 20,697 megawatts per day. Of this total, 78 private-sector power facilities contribute a production capacity of around 8,778 megawatts daily.
Additionally, BPDB imports 1,160 megawatts of power from India, with the Adani power station in Jharkhand alone providing nearly 750 megawatts each day. Officials from the finance ministry and power division indicated that the government plans to gradually settle all outstanding arrears and dues to the IPPs and rental power plants by the next fiscal year FY2026.The interim administration led by Prof Muhammad Yunus has resolved to pay off the outstanding capacity charges, power purchase bills, and other obligations to both local and foreign IPPs and rental electricity producers.
Among these producers are Indian Adani Power, Bangladesh-China Power Company Plant (Payra power plant), Meghnaghat 450mw Power Ltd, 210mw Rural Power Co Ltd, 335mw Summit-Meghnaghat Power Ltd, 414mw Sembcorp NWPC Ltd, 145mw Aggreko International Projects, United Power, and Doreen Power.” State subsidies are typically required to make up the difference between the prices at which the state-run power board sells electricity to consumers and the prices it buys from the IPPs.
The majority of IPPs and rental power plants are diesel or HFO-based, which makes them expensive to operate. At prices ranging from Tk 14 to Tk 26 per kilowatt-hour (kwh), the BPDB buys electricity from private-sector plants to send into the national grid. The average retail price that consumers pay for power is approximately Tk 8.95 per unit, whereas the average bulk electricity cost is Tk 7.04 per unit.
