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SUNDAY, JUNE 15, 2025
Banks gave loans to Beximco, S Alam without checking assets: Energy adviser

Energy

TBS Report
30 November, 2024, 03:25 pm
Last modified: 30 November, 2024, 04:17 pm

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Banks gave loans to Beximco, S Alam without checking assets: Energy adviser

Fouzul has advised banks to approve loans based on the assets of a company or an individual

TBS Report
30 November, 2024, 03:25 pm
Last modified: 30 November, 2024, 04:17 pm
Energy Adviser Dr Muhammad Fouzul Kabir Khan spoke at a seminar titled ‘The Role of Smart Grid in the Future Power System’ at the United International University (UIU) in the city on Saturday (9 November). Photo: UNB
Energy Adviser Dr Muhammad Fouzul Kabir Khan spoke at a seminar titled ‘The Role of Smart Grid in the Future Power System’ at the United International University (UIU) in the city on Saturday (9 November). Photo: UNB

Banks gave loans to Beximco Group and S Alam Group in the past just based on their balance sheets without checking the two conglomerates' assets, said Power, Energy and Mineral Resources Affairs Adviser Muhammad Fouzul Kabir Khan today (30 November).

"Before approving loans, banks generally review a company's balance sheet instead of looking at assets. Such decisions are also taken during lunches and dinners," he said.

Keeping with that system, "banks did not check Beximco and S Alam's assets and only reviewed their balance sheets before approving loans. That's why no money can be found in the bank accounts of the two groups now. All are empty," the adviser added.

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He made the remarks while addressing a seminar, titled "Rapid Transition to Renewables: Role of Domestic Financial Institutions", organised by the Economic Reporters' Forum (ERF) in Dhaka.

Fouzul said ordinary entrepreneurs cannot attend such lunches or dinners as the entrepreneurs of the renewable energy sector do. "As a result, common entrepreneurs do not get loans easily."

He advised the banks to approve loans based on the assets of a company or an individual.

During the now-ousted Awami League's 15-year rule, Beximco Group and related companies took total loans of Tk36,865 crore from seven banks in the country.

During the same period, S Alam Group and its associate companies took out Tk 95,331 crore between 2017 and June 2024 from six banks, with 79% of the sum coming from Islami Bank.

Saying a new policy for the renewable energy sector is being formulated, the adviser said the interim government will provide land and interconnected facilities for the projects of this sector.

"Entrepreneurs will only plug and play. Efforts are on to utilise the unused land of railway, road and other government institutions for the renewable energy sector," he said.

However, the import duty for the equipment used in this sector would not be reduced in order to create a backward linkage industry at the local level, he added.

"The government is moving away from the IPP policy and creating a merchant power policy, under which the power producers will find their customers. The government will not be the only customer anymore and the producers will be able to use the government's distribution and transmission lines by paying fees," Fouzul said.

He further said the government will buy only 10% to 20% of electricity from the new power plants that are in the pipeline, and it will reduce pressure on the government to pay power bills.

"The lack of competition during the government's procurement is a major problem for the country's economy. That is why we have decided to make everything public so that no one needs to know any relatives of any minister or secretary to do business with the government," the energy adviser said.

Urging the government to make financing in the renewable energy sector easier, Centre for Policy Dialogue Research Director Khondaker Golam Moazzem said, "To make funding in this sector easier, 18 types of instruments are followed worldwide. In Bangladesh, only non-concessional loans are given. Financial instruments have to be increased and the way for foreign investment has to become easier."

Center for Environment and Participatory Research Chairperson Gouranga Nandy presented the keynote paper at the seminar, in which he proposed a special fund for easy financing and sale of the additional power by individual producers to the government.

The event was moderated by ERF General Secretary Abul Kashem and presided over by ERF President Refayet Ullah Mirdha.

Top News

energy / Renewable Energy / Bank Loans

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