Massive arrears may disrupt power supply during Ramadan, summer: BIPPA

Independent power producers have warned that mounting unpaid bills could hamper electricity supply in the coming months, including during Ramadan and the peak summer season.

The Bangladesh Independent Power Producers' Association (BIPPA) today (19 February) said outstanding dues amounting to Tk13,000–Tk14,000 crore have made it increasingly difficult for private plants to operate at full capacity.

Speaking at a "Power Industry Brief and Interactive Session" at a city hotel, BIPPA President David Hasanat said independent producers have not been receiving regular payments since July last year.

"We have not been receiving regular electricity bill payments since July last year but are still trying our best to continue generation during the tenure of the new government," he said.

Hasanat added that in many cases, payments have remained pending for eight to 10 months, leaving companies struggling to secure financing.

"Banks are not facilitating the opening of letters of credit to import fuel oil needed to run plants," he said.

Warning of possible supply stress, he said, "With large sums outstanding, it will be difficult to supply electricity as per demand during the holy Ramadan and summer."

Former BIPPA president Imran Karim said the payment crisis began in 2022 following the Russia-Ukraine war.

He noted that the previous Awami League government issued bonds in two phases to adjust dues, but by July 2024 four months of bills were still outstanding. After that, the outstanding payment issue increased again, said Imran Karim.

According to BIPPA, the interim government cleared part of the backlog between October 2024 and July 2025, reducing arrears to around three months. However, payments reportedly slowed again after July.

Responding to a question, David Hasanat alleged that instead of settling bills, authorities decided to impose penalties, including Liquidated Damages (LD), on producers for failing to supply electricity.

He claimed this was done in a way that could create difficulties for the new government over load-shedding and also alleged discrimination between foreign and local power companies.

The dispute centres on the Bangladesh Power Development Board (BPDB), which has been imposing LD for failure to provide contracted electricity since 2022.

BIPPA argues that under the Power Purchase Agreements (PPAs), BPDB is required to pay bills within 40 days of submission, and that producers are not legally bound to supply power if payments are not made within that period.

On 2 February, BPDB decided to take steps to recover penalties and excess capacity payments with interest for the period from July 2022 to December 2024.

Imran Karim said any deduction of penalties must follow due legal process.

"There is no scope for deducting penalties because payments were not made on time," he said.

Meanwhile, BIPPA leaders sounded the alarm over rising demand. Karim said peak demand on Wednesday reached 13,000MW, unusually high for this time of year, signalling further pressure on the system in the months ahead.

"We want to work with the new government," Hasanat said, "but there must be a balance between expectations and capability."