The country's power and energy sector is grappling with a severe financial crisis due to significant outstanding debts. The Power Development Board (PDB) and Bangladesh Oil, Gas & Mineral Corporation (Petrobangla) collectively owe over Tk 65,000 crore. Among these dues, private power plants are awaiting payments of nearly Tk 8,000 crore. The association of private sector power plant owners has warned that they may be unable to sustain operations unless these payments are cleared.
As winter fades, electricity demand—currently at around 11,000 megawatts—is expected to surge, potentially reaching 18,000 megawatts in the summer. This sharp increase raises concerns over possible load shedding, which could also disrupt irrigation activities.
Financial Crisis Threatens Power Generation
David Hasanat, President of the Bangladesh Independent Power Producers Association (BIPPA), noted that during the previous government’s tenure, unpaid dues accumulated for nearly six months. However, concerns were not as pressing then due to lower financial losses from currency depreciation.
PDB Chairman Rezaul Karim assured that outstanding payments are being settled gradually and that the supply of coal and gas will be increased in the coming days to stabilize power generation.
KM Rezaul Hasnat, also a leader within BIPPA, acknowledged the government's financial struggles but emphasized that power producers are unable to continue operations without timely payments. A prolonged financial crisis could severely impact electricity supply during peak summer months.
Heavy Reliance on Private Power Producers
Bangladesh's power sector now heavily depends on private companies. A study by the Bangladesh Institute of Development Studies (BIDS) last year revealed that private power plants add at least $1 billion (Tk 11,000 crore) in additional expenses annually.
Petrobangla Chairman Md Rezanur Rahman stated that payments are being made in phases to alleviate financial pressure. He added that a specific budget is allocated weekly to clear outstanding dues and that discussions with the Ministry of Finance and Bangladesh Bank are ongoing regarding foreign currency availability.
Policy Criticism and Sector Challenges
Professor Dr Shamsul Alam, Vice President of the Consumers Association of Bangladesh (CAB), criticized the government's continued reliance on private power companies, mirroring the policies of the previous administration. He also pointed out that private firms are aggressively demanding their dues.
Despite the country's installed power generation capacity of 27,000 megawatts, the sector is struggling to meet a demand of just 16,000 megawatts, highlighting inefficiencies and financial mismanagement. With summer approaching, the looming threat of power shortages remains a significant concern for businesses and households alike.
