The Bangladesh Independent Power Producers’ Association (BIPPA) has urged the government to pay their dues on urgent basis, otherwise the country is going to face severe electricity crisis during the Summer.
At a press conference on Thursday, the leaders of the organisation said the power supply shortfall may stand at 2,500-3,000MW during the peak time, if the HFO based private power producers can not import fuel due to not payments of the dues.
Currently, the government owes the private power producers nearly Tk16,000 crore as dues of six-seven months, including Tk10,000 crore for HFO-based electricity, according to the BIPPA.
Usually, the government makes delayed payments to the private producers within 60 to 70 days, but this time the delay exceeded 180 days, although the Power Purchase Agreement (PPA) has a 30-day payment term, it said
“Our capitals have become negative as we’re not getting our dues. In this context, how will we be able to supply electricity, if we don’t get the payment?” Imran Karim, BIPPA’s former president, told the press conference.
As a result, the upcoming Boro season, the country’s largest crop harvesting time, is likely to suffer a lot alongside industries and general consumers during the Ramandan because of the supply shortfall against an estimated peak demand of 18,000MW, he also warned.
In general, importing furnace oil takes 40 to 45 days, but the Boro season will start in mid-March, whereas the Ramadan will start from early March, he explained.
The BIPPA leaders also called for a comprehensive investigation into allegations of irregularities against the private power producers, and urged the government to form a joint taskforce to address these concerns effectively.
In addition, BIPPA leaders have welcomed the recently established tariff review committee formed by the interim government, emphasising the need for transparency and fairness in the sector.
Responding to a question about the allegations against them, BIPP’s current president David Hasanat said, “It wouldn’t be fair to generalize everyone as being involved. Some may be, but we are certainly demanding a proper investigation into these allegations.”
Asked about purchasing electricity from India’s Adani Group, he explained, “There is no tax or VAT on Adani’s electricity, while we’ve to pay more than 15% tax on fuel.
Despite this, the cost per unit from Adani is Tk17.20, whereas, even with taxes and VAT, the cost per unit from fuel-based plants is Tk17.06. Without the tax on oil, our cost would be even lower.”
He further mentioned, “Before finalising the deal with Adani, the government at the time strategically promoted the notion that Adani’s electricity would be cheaper than that from furnace oil-based power plants. We have raised this issue in various government forums several times.”
In his presentation, Imran Karim highlighted that since the end of 2022, the devaluation of the Bangladeshi Taka against the US Dollar has resulted in losses of approximately Tk5,500 crore for private power plants.
Additionally, delayed payments from the Power Development Board (PDB) have led to an extra Tk 3,200 crore in interest payments on bank loans, further compounding the losses, he added.
“Many private sector companies now have negative equity, and banks are losing confidence in them. To address this crisis, we have proposed the formation of a joint task force with the government,” he stated.
