Private power producers warn of power outage in Ramadan, summer if 60% dues not paid

Independent power producers yesterday warned that Bangladesh could face widespread load shedding during Ramadan and the coming summer if the government does not immediately release a significant portion of long-overdue power bills.

At a press conference held at a city hotel, leaders of the Bangladesh Independent Power Producers' Association (Bippa) said outstanding dues from the Bangladesh Power Development Board (PDB) have mounted to around Tk14,000 crore, with payments delayed for eight to 10 months.

The total outstanding bills combined with local and joint ventures could cross Tk25,000 crore.

"If at least 60% of the outstanding bills are not paid immediately, keeping power plants online will become impossible," said Bippa President David Hasanat.

"The consequence will be severe and widespread load shedding during Ramadan and the peak summer months."

The press conference was attended by senior Bippa officials and representatives from private power plant companies, who operate heavy fuel oil-based plants supplying electricity to the national grid.

"No business can survive without payment for 8-10 months," said David, adding that prolonged payment delays have already pushed many local power producers to the brink.

The Bippa president said, "Keeping power plants afloat under such conditions is simply not possible. If plants are forced to shut down due to non-payment, no one can place even one percent of the responsibility on us."

According to Bippa, the payment crisis has already caused power producers to suffer losses of around Tk8,000 crore, primarily due to currency fluctuations and additional bank interest burdens.

"Our borrowing costs have exploded. Fuel imports, loan servicing, opening LCs – everything," said Hasanat.

LD imposition amid payment default sparks outrage

Beyond payment delays, Bippa leaders strongly criticised PDB for imposing Liquidated Damages (LD) on power producers for alleged excess outages, even as bills remain unpaid.

"This is the most alarming contradiction," Hasanat said. "On one hand, PDB cannot pay us for months. On the other hand, it is deducting LD from our bills. This is neither logical nor fair."

Under Clause 13.2(1) of the Power Purchase Agreement (PPA), PDB is required to pay bills within 40 days of submission.

Power producers argue that prolonged payment default suspends their obligation to supply electricity, yet they have continued generation in the national interest.

Bippa alleged that LD rules are being applied in a discriminatory manner, targeting domestic entrepreneurs while foreign and joint-venture power producers are treated differently.

"There are effectively two systems in the power sector," Hasanat said. "Local entrepreneurs are penalised, while joint-venture and foreign IPPs continue to receive regular payments."

BERC arbitration and 'status quo' violation

Around 30 HFO-based power plants had earlier initiated arbitration proceedings before the Bangladesh Energy Regulatory Commission (BERC), challenging the legality of LD deductions.

Bippa said on 8 January 2026, BERC dismissed the applications and advised the parties to resolve the dispute through discussions with PDB.

Former Bippa president Imran Karim in his presentation said that during the arbitration process, BERC had instructed all parties to maintain status quo regarding LD calculation and deductions.

"Despite that clear instruction, PDB has unlawfully deducted LD from the dues of certain power producers," Karim said. "This has created fresh uncertainty and anxiety across the sector."

He warned that such instability, particularly ahead of Ramadan and the irrigation season, could have serious repercussions.

"This situation has directly led to loan repayment failures, risks of loan classification, pressure on the banking sector, and a reduced ability to import fuel," Karim added.

'Same PPA, different treatment'

Highlighting what he described as clear inconsistencies, Imran Karim cited the case of Barisal Electric Power Company Limited.

"PDB initially deducted LD from Barisal Electric's capacity payment," he said.

"Later, based on legal opinion and with ministry approval, the deducted amount was refunded on 21 May 2025."

"Under identical PPAs, one company gets its money back while others continue to face deductions," he added. "Is this equal treatment before the law?"

Foreign vs local producers

Bippa leaders also pointed to what they described as a dual reality in PDB's dealings with foreign and domestic power producers.

Imran Karim said Adani Power reduced electricity supply to Bangladesh due to prolonged non-payment by PDB. No LD was imposed.

"Foreign companies reduce supply when payments are delayed—and no LD is charged because PDB contractually cannot," Hasanat said. "But local producers continue supplying electricity despite massive losses, and we are punished for it."

"Is supplying electricity during Ramadan, summer, and irrigation season a crime?" he asked.

Political uncertainty and fear of reprisal

Hasanat expressed concern that the timing of LD imposition – just days before the end of the interim government's tenure – could worsen tensions with the incoming administration.

"If the intention was to leave behind a smooth mechanism, why impose LD at the very end of the tenure?" he asked.

"This will only create confrontation between IPPs and the next government."

He also spoke of a growing fear among power producers that they could face political backlash.

"There is a perception that all IPPs are aligned with the Awami League," Hasanat said.

"We fear that when we raise our legitimate concerns, we may be branded as troublemakers."

According to the National Review Committee, many power deals during the Sheikh Hasina regime were rooted in cronyism and kleptocracy.

Replying to the findings, David Hasanat said, All IPP owners are not angels, some deals were unfair.

"The government should identify those deals and take action. Bippa will fully cooperate. But it is unjust to label the entire sector as corrupt."

He added that IPPs remain open to renegotiating contracts within the PPA framework if the government initiates such a process.