Bangladesh power sector is at a critical junction as the BPDB has failed to provide requisite letter of credits (LCs) over payment backlog to the country's major power suppliers including 1,224MW S Alam-sponsored Banskhali plant and the 1,320MW Bangladesh-India joint venture plant at Rampal, 1,600MW Adani power plan, 1350 MW Bangladesh-China Power Company Ltd or Payra Power plant and a 1200MW JICA funded coal fired plant at Matarbari for several months.
Adani group has already shut its one unit of the power plant, which has the electricity-generation capacity of around 750 megawatts, the other companies are facing operational challenges due to outstanding payments and sent letters to the power division that warned that they may halt electricity supply at any moment as they failed to procure coal to run their plants.
"Our unpaid electricity purchase dues totaling Tk 32,000 crore as of June, and this amount continues to rise." BPDB Chairman Rezaul Karim told adding that the BPDB has expedited payment settlements since the interim government assumed control.
BPDB's official data indicates a Tk 3,521 crore loss monthly due to the gap between electricity tariffs and costs.
The data also shows that the country's seven coal-fired power plants contribute 5,028 MW to the total 27,000 MW generation capacity, alongside 1,600 MW imported from India through dedicated power lines.
The CEO and Managing Director of Payra Power plant A.M. Khorshedul Alam said that the company faces operational challenges due to outstanding payments totalling Tk 5,800 crore. Delaying Unit 2's overhaul from 1 November 2024 could result in a USD $10 million loss.
"BPDB has not provided the required LC for $170.03 million from Bangladesh Krishi Bank nor cleared the overdue amount of $846 million as of 27 October 2024," Adani Power Jharkhand Ltd (APJL) president Krishna Rao stated in the letter to the Power Division recently.
APJL previously had forewarned the BPDB of "suspending electricity supply from October 31 if its overdue payments worth US$846 million were not cleared by October 30", according to the letter.
It also warned of shutting the remaining power unit, having the generation capacity of 750MWs, from November 7 if the BPDB does not clear the payments by next week, the BPDB official added.
Adani also alleged that BPDB in the latest instance did not provide requisite letter of credit (LC) for $170.03 million for the power import. India's Adani Power (Jharkhand), a 1,600MW power supplier, has warned it may halt electricity supply to Bangladesh over an unpaid bill dispute amounting to Tk 10,086 crore.
Local power plants - the 1,224MW S Alam-sponsored Banskhali plant and the 1,320MW Bangladesh-India joint venture plant at Rampal - have significantly reduced electricity production, contributing to over 1,000MW of load shedding.
The BPDB is currently struggling to pay dues to many independent power producers, oil-fired rental and coal-fired plants.
Additionally, local power plants - the 1,224MW S Alam-sponsored Banskhali plant and the 1,320MW Bangladesh-India joint venture plant at Rampal-have significantly reduced electricity production, contributing to over 1,000MW of load shedding due to similar payment issues.
Meanwhile, the 1,224MW Banskhali power plant, backed by S Alam Group, is seeking resolution of Tk 2,000 crore in outstanding payments.
"We request BPDB to settle outstanding payments promptly and ensure future payments are timely to maintain LC issuance for suppliers. This will enable the continued operation of the power plant until the next coal shipment arrives," SS Power 1 Managing Director Tan Zheling stated in a letter to BPDB on 2 October 2024.
Bangladesh China Power Company's 1,320 MW plant, which combines outputs from two units, has announced plans to shut down Unit 2 for a two-month overhaul starting 31 October 2024.
Managing Director and CEO of Bangladesh-China Power Company Ltd., A.M. Khorshedul Alam, noted that the company faces operational challenges due to outstanding payments totalling Tk 5,800 crore. Delaying Unit 2's overhaul from 1 November 2024 could result in a USD $10 million loss, he said..
The Bangladesh-India joint venture Friendship Plant also suspended Unit 2 due to coal shortages, an official reported. Unit 1 remains operational, producing only 539 MW due to the shortage of coal and unpaid bills amounting to Tk 5,000 crore.
The 1200MW JICA funded coal fired plant at Matarbari also stopped production due to coal shortages, another official said.
"We are unable to maintain regular payments to baseload, low-cost power plants, which has led to over 1,000 MW in load shedding despite lower seasonal temperatures," a BPDB official said.
The official warned that conditions will deteriorate further if BPDB fails to make timely payments as required by the Power Purchase Agreements (PPA).
