The Chinese Embassy in Dhaka has formally urged the Bangladesh government to settle outstanding payments of Tk 2,668 crore owed to SS Power Limited, a 1,320 MW power project in which Chinese firm SEPCOIII holds a 30% stake.
In a letter dated November 25, 2024, the Economic and Commercial Office of the Embassy of the People’s Republic of China, signed by Counsellor Song Yang, addressed the issue to Bangladesh’s Power Division. The letter highlighted that the project was financed by a foreign loan of $1,782 million from six Chinese banks and Rupali Bank of Bangladesh.
To date, $1,592 million of the loan has been disbursed, with $189 million pending withdrawal. The letter noted that SS Power Limited had already made two installment payments, while the third installment—approximately $150 million (Tk 1,830 crore)—is due on December 19, 2024.
The project has supplied electricity worth Tk 8,179.96 crore to the Bangladesh Power Development Board (BPDB) up to November 19, 2024. Of this, Tk 5,511.74 crore has been paid, leaving an outstanding balance of Tk 2,668.22 crore.
The embassy emphasized that non-payment of dues could lead to significant risks, including delays or defaults in foreign loan repayments, disruptions in coal imports essential for power generation, and interruptions to electricity supply to the national grid. The letter also warned of broader consequences, including the potential loss of $189 million in pending loan withdrawals, cessation of future financing from Chinese institutions, and damage to Bangladesh’s reputation as a stable investment destination.
“An estimated $30-40 million (Tk 360-480 crore) is required monthly for coal imports to maintain electricity supply,” the letter said. It stressed that timely payment of at least Tk 2,200 crore out of the outstanding Tk 2,668.22 crore by November 30, 2024, is critical.
Failure to address the issue, the embassy noted, could undermine the country’s ability to attract foreign investments in its energy sector. “Timely payment is essential to prevent disruptions to this vital power generation project and to uphold Bangladesh’s reputation as a reliable partner in international energy cooperation,” the letter concluded.
Additionally, the embassy underscored that successful processing of the pending loan withdrawal would inject $91.16 million directly into Bangladesh through the project’s EPC contractor, further aiding economic activity.
Bangladesh Power Development Board (BPDB) has a plan to run the coal-fired plants with full capacity by shutting down inefficient most of the oil-fired plants in the coming summer.
“We have a plan to run most of the coal-fired plants with full capacity in the coming summer to come down the cost of the generation,” BPDB chairman Engineer Md Rezaul Karim told the Just Energy News.
Due to the non-payment of outstanding bills by BPDB timely, SS Power is facing severe financial difficulties to import coal for this power plant and repayment of 3rd installment of long term foreign currency loan, Chief Finance Officer (CFO) of SS Power Plant Ebadat Hossain Bhuiyan told the Just Energy News with disappointment.
“This is a flagship company of this country in the private sector in terms of foreign Joint venture investment with substantial foreign currency loan utilization in local constructions by EPC and substantial Bangladeshi employments. This is a least cost power source of the country also.”
“Moreover failure to pay loan installment may trigger multiple impacts in other future projects also.”
He claimed the plant is running with full capacity now.
The interim government’s high powered committee is now investigating on seven large power plants including 1320MW Indian Adani, 1320MW Pyara and 1320MW SS Power Plant.
