The Finance Division under the Ministry of Finance has blocked Tk 4,700 crore in subsidies allocated to the Bangladesh Power Development Board (BPDB), officials have confirmed.
The subsidies were provided as budgetary support to cover BPDB’s losses for the fiscal years 2019-20, 2020-21, and 2021-22. Recently, the Finance Division officially notified the BPDB of its decision to withhold the funds.
Why Was the Subsidy Blocked?
The Finance Division has been depositing surplus or unspent funds from ministries, divisions, and public entities into the government treasury. However, it does not have legal authority to withhold subsidies provided as budgetary support unless those funds remain unused.
Finance Division officials argue that since BPDB did not utilise the full amount of the subsidies during and after the COVID-19 period, the unused portion was treated as surplus and deposited into the treasury.
According to the Power Division, this was a mistake on BPDB’s part. Despite incurring total losses of Tk 85,858 crore – due to selling electricity at rates fixed by the Bangladesh Energy Regulatory Commission that are lower than production costs – BPDB failed to fully utilize the allocated subsidies.
Power Ministry Requests Refund of Funds
The Ministry of Power, Energy and Mineral Resources has formally requested the Finance Division to return the Tk 4,700 crore to BPDB.
In a letter to the Finance Division, the ministry highlighted the urgent need for the funds to clear large outstanding bills and maintain uninterrupted power supply.
Referring to a proposal from BPDB, the ministry noted that the organization faces severe financial stress, including an annual repayment obligation of US$1.7 billion. It emphasized that BPDB has no surplus to remit, as its continued losses have left it financially constrained.
Finance Division Rejects Refund Request
The Finance Division has rejected the request to return the funds, stating that the money has already been deposited into the government treasury.
It cited Article 90(3) of the Constitution, which prohibits the return of public funds once deposited, unless a new law is passed by Parliament and a corresponding rule is issued by the President.
BPDB Chairman Responds
“We are in communication with the Finance Division and remain hopeful that the subsidy funds will be returned,” BPDB Chairman Engr Rezaul Karim told Just Energy News.