State-owned Bangladesh Power Development Board (BPDB) seeks Tk 30 billion loan from Power Sector Development Fund (PSDF) to pay bills of purchasing costly electricity from the private sector power producers.

BPDB Secretary Mohammed Salim Reza wrote an official letter to the Power Division’s secretary recently in this matter.

This development followed the private sector power producers’ call for the power ministry’s intervention in payment of the outstanding bills worth $1.7 billion.

BPDB said they had been forced to produce additional electricity from the liquid fuel-based power plants due to a shortfall in natural gas supply.

According to the Power Division, the outstanding bills of electricity stands at Tk 274.97 billion to private power producers between February and June, 2022.

Against the bills, the BPDB projected to earn only Tk 70.86 billion in May and June, 2022. So, the deficit of the BPDB stands at Tk 204.11 billion.

The private power producers couldn’t procure fuel to continue production of electricity due to delay in payment, BPDB letter read.

Besides, the gas-based power plants suffered due to supply crisis of natural gas, it said.

The BPDB incurred a loss of Tk 283.85 billion in the fiscal year 2021-22. But it received Tk 73.75 billion so far, according to the letter.

“So, the BPDB now faces serious liquidity crisis and the board will need the PSDF loan,” it added.

Bangladesh Energy Regulatory Commission (BERC) already rejected the proposal    of providing the fund to BPDB.

Consumers Association of Bangladesh (CAB) senior vice president Prof Shamsul Alam said the illogical cost of Tk 120 billion in energy sector and another Tk 420 billion in power sector were the reasons for the increased power tariff.

He said the government would import furnace oil through private power producers to feed independent power plants.

“But the facility will need a payment of additional Tk 81 billion,” Prof Alam said. He suggested that 11-point reforms are necessary in the country’s power sector.