Private power producers have urged the Bangladesh Bank for a solution to recover losses stemming from delayed payments by the Bangladesh Power Development Board (PDB).

Members of the Bangladesh Independent Power Producers Association (BIPPA) made this request at a meeting with Ahsan H Mansur, governor of the central bank, at his office in Dhaka yesterday.

The BIPPA members, comprising mostly owners of liquid fuel-based power plants, told Mansur that they incurred combined losses of Tk 8,500 crore due to delayed payments by the PDB following the start of currency fluctuations.

The exchange rate between the taka and the US dollar has been repeatedly revised since August 2021, with the local currency depreciating by more than 30 percent.

"The governor told us they will closely monitor the exchange rate with commercial banks in the future," BIPPA President David Hasanat told The Daily Star.

He said the central bank governor was very cordial and assured him that he would convey their message to senior government officials.

BIPPA has long been pushing the government to clear at least half of its overdue payments, amounting to Tk 9,000 crore, as soon as possible.

They wrote to the Ministry of Power, Energy and Mineral Resources on January 9, requesting that the payments be cleared within 10 days to ensure uninterrupted power supply during Ramadan.

Hasanat said that the unpaid dues are preventing local power producers from importing the furnace oil needed to generate electricity.

"If we don't get at least half of our payments, we will not be able to open letters of credit to import furnace oil in due time to generate adequate power during Ramadan," he added.

In its letter, BIPPA mentioned the significant financial losses being caused by the taka's devaluation.

Besides, the foreign exchange losses of independent power producers were compounded by delayed interest payments.

"These losses have eroded financial confidence among lenders," it said.

Hasanat provided an example of how delayed payments exacerbate foreign exchange losses.

"When we submitted bills [for electricity or fuel imports], the exchange rate was Tk 118. But by the time we received payments, it had risen to Tk 126," he said.

The PDB is obligated under its power purchase agreements to clear payments within 45 days.

However, payments are being delayed for more than five months at a time, with the resulting backlog having persisted for more than three years now.

"The situation is critical," BIPPA said in its letter, adding that the nation's energy supply chain faces imminent collapse if the payments are not made.

This will, in turn, have severe and widespread impacts, jeopardising agricultural production, national food security, industrial output, and essential household services during crucial periods like Ramadan and summer, it added.