Uninterrupted power in summer: Energy ministry seeks dollars, unpaid subsidy
The ministry of power, energy and mineral resources has sought the undisbursed subsidy at the earliest to continue with uninterrupted electricity supply during the summer months.
The Bangladesh Power Development Board is already short in generation against the demand and has started countrywide load-shedding, especially in rural areas.
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Currently, the government has to conduct around 1,500 megawatts to 1,800MW load shedding due to fuel shortage, which means rural areas have to contend with five to six hours of power outages in a day.
As of 12:00pm yesterday, PDB produced 12,670MW of electricity against the demand of 14,000MW. Of the production, 5,600MW came from gas-based power plants and about 4,000MW from coal-based plants.
The government has earmarked Tk 35,000 crore as subsidy for the power sector in this fiscal year's budget.
As of March, Tk 18,000 crore has been disbursed in the form of bonds or cash. But the power division said the amount was insufficient and sought the rest of the amount before the end of fiscal 2023-24 in June.
Subsequently, on Wednesday, Nasrul Hamid, the state minister for power, energy and mineral resources, met with Finance Minister Abul Hassan Mahmood Ali and sought the release of more dollars and the disbursement of subsidies on time.
During the meeting power and energy ministry officials said about $2 billion is needed this fiscal year to clear the dues and also for working capital.
Of the $2 billion, $1 billion will go towards clearing dues of India's Adani Power and Chevron, which is producing gas from Bibiyana, the major gas field in Bangladesh. PDB owes Adani $700 million and Chevron $300 million.
The rest of the amount will be used to pay the bills of fuel oils, liquefied natural gas and coal for power generation.
Ali has verbally agreed to disburse about Tk 1,500 crore as cash support immediately as a temporary solution, according to ministry officials informed with the contents of the meeting.
Besides, the finance minister said they will issue another Tk 7,000 crore in bonds soon to pay the power sector dues. The rest of the amount will be disbursed later as arrears, they added.
"Usually, the finance division pays the maximum of the allocated subsidies as arrears after the fiscal year, which puts the power division under pressure," said a top power division official wishing anonymity.
When the payment stops for a while due to any crisis like a dollar shortage, the figure piles up, he added.
Earlier in a briefing, Hamid said that uninterrupted power supply will depend on the disbursement of adequate dollars this year.
The Bangladesh Bank is supplying a limited amount of dollars to maintain its foreign exchange reserves according to International Monetary Fund conditions.
Bangladesh needed to maintain at least $19.27 billion in net foreign reserves at the end of March and $20.11 billion at the end of June to authorise the disbursement of the next tranche of the $4.7 billion loan from the Washington-based multilateral lender.
As of April 3, gross foreign exchange reserves stood at $19.65 billion, according to data from the BB.
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