The Ministry of Finance has approved the release of a subsidy of Tk 20.67 billion (Tk 2,067.05 crore) to settle outstanding payments for March owed to the country’s privately operated power plants.
In a directive issued on 21 April by the Budget Wing-1 of the Finance Division, it said the funds would be disbursed in favour of the Bangladesh Power Development Board (BPDB) to clear bills of Independent Power Producers (IPPs) and rental power plants (RPPs). The subsidy will be drawn from the power sector allocation in the revised budget for the 2025–26 fiscal year.
According to the directive, the subsidy amount has been determined based on the actual deficit recorded in March across 85 IPPs and nine RPPs. It added that all outstanding deficits in the power sector up to February have already been settled.
However, the Finance Division has imposed several conditions on the release of the funds. No payments will be made from this allocation to two power plants that lack approval under public procurement regulations, nor will any funds be used to pay for electricity imports from India. The authorities have also been instructed to obtain the necessary approvals for these plants without delay.
The directive noted that action regarding two newly added power plants—BR Power Gen Shreepur 160MW and RPCL-Norinco International Power Limited—will be taken following further clarification.
Additionally, in the case of six approved power plants, the Finance Division has instructed that the actual subsidy be adjusted in line with newly determined tariffs alongside previous allocations.
It further emphasised that the released funds must be used solely for settling dues of the designated IPPs and RPPs, and cannot be diverted to any other purpose. All relevant government financial regulations must be strictly followed.
To enhance transparency in the power sector, authorities have been directed to submit detailed monthly deficit data to the Finance Division within the first week of each month. The subsidy will later be reconciled with audited figures of actual liabilities.
The Finance Division also stressed the need for structural reforms to better manage subsidies over the long term. These include reducing capacity charges in power purchase agreements, maintaining comparative accounts of plant-wise generation and sales, and introducing a real-time data-driven ERP system.