Pvt producers stress subsidy disbursements to clear backlog of power bills
Independent power producers have sought directives in the upcoming national budget regarding subsidy disbursements to clear the backlog of power bills, which is causing disruptions in electricity generation and resulting in load shedding in the country.
Additionally, a recommendation was put forward during a dialogue held at the Biddut Bhaban in the capital on Monday, calling for a harmonised import duty on primary fuel to reduce the cost of power generation.
The Forum for Energy Reporters Bangladesh organised the dialogue on "Budget 2023-24: Challenges and Expectations for Stakeholders in the Power and Energy Sector" in association with the Bangladesh Independent Power Producers Association (Bippa).
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As of March this year, the Bangladesh Power Development Board (BPDB), which purchases electricity from private and public plants, owed Tk18,000 crore to the IPPs.
The companies are unable to import fuel to run their plants due to their credit limits with banks due to BPDB's inability to make payments on time.
Bippa President Faisal Khan said that they are going through hardship.
"Many local power producers are on the brink of bankruptcy and insolvency. We urged the ministry to look into the matter so that this situation does not continue," he added.
"Because such a situation could have chain reactions," he said worriedly, expressing concern that many companies might fall apart.
Requesting State Minister for Power, Energy, and Mineral Resources Nasrul Hamid to take an initiative to get the subsidy allocated for his ministry, Faisal Khan said, "Our request is to get the allotted subsidy timely, so that our companies can make loan repayments."
In a keynote presentation, Engineer Md Mozammel Hossain, vice-president of Bippa and managing director of Summit Power Limited, said the planned subsidy for FY 2022-2023 was Tk27,000 crore, but disbursement was only Tk1,000 crore. Therefore, Tk26,000 crore from the subsidy is yet to be disbursed.
He also recommended a harmonious import duty on primary fuel to reduce the cost of electricity production.
Nasrul Hamid requested that the private power producers have more patience regarding the recovery of outstanding bills.
"Moving forward in the current situation is very challenging for a country like us. Challenges come one after another. A combined effort is required to face such challenges," he said.
He said that the country has all the infrastructure to meet the power demand, but it lacks enough energy.
"However, we will get 500 mmcf to 600 mmcf of gas by the next two years. We have that plan. Bhola has shown a huge prospect, as the island has around 3 tcf reserved, as we have estimated," he added.
In order to reduce the power generation cost of BPDB, Shafiqul Alam, IEEFA's Energy Finance Analyst for Bangladesh, suggested maximising the renewable energy for four to five hours in the daytime by generating 2GW to 3GW of electricity, which will help reduce the power shortfall.
Rishan Nasrullah, executive director at FERB, moderated the programme presided over by its chairman, Md Shamim Jahangir.
Energy expert Ijaz Hossain and former member of Berc Maqbul E-Elahi Chowdhury, among others, spoke at the discussion.
