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Facing a perfect storm of working-capital woes, a dollar crunch and protracted payment delays, local independent power producers have appealed for a change in how banks categorise them.
In a letter to the Finance Division, they argue for being exempted from "group or related party classification", fearing the financial troubles of their sponsors are unfairly impacting their access to crucial credit.
The Bangladesh Independent Power Producers' Association (BIPPA), representing 60 member companies, sent the letter in light of mounting challenges.
As of June this year, the government owed over $2.4 billion in power bills to these private generators, causing cash flow problems, loan classification issues and obstacles in opening Letters of Credit (LCs) for essential fuel and spare parts purchases.
"In light of these challenges, we respectfully request your consideration in formulating a policy and issuing a necessary circular to exclude electricity generation companies from group or related party classification, recognising them as independent power producer SPVs," wrote Faisal Khan, BIPPA president.
The association argued this adjustment would enable its members to access bank loans, ensuring a seamless flow of electricity generation.
Currently, banking regulations bar individuals in default from loans, but entities associated with them may still qualify if the default wasn't deliberate.
A recent government gazette allows loans for such associated institutions, with an explanation to the central bank affirming they aren't willful defaulters.
In the letter to the Finance Division, Mr Khan elaborated on the difficulties faced by power producers, including the global economic downturn, ongoing dollar shortage and delayed payments from the Bangladesh Power Development Board (BPDB).
"Procuring fuel for power plants has become particularly daunting due to the severe USD crisis in the market," he claimed. Despite repeated attempts, The Financial Express was unable to reach the BIPPA president for further comment.