Power Division seeks Tk 27 billion urgent subsidy for BPDB

Power Division has sought Tk 27 billion as subsidy against tariff deficit for the state-run Bangladesh Power Development Board (BPDB) to help ensure uninterrupted power supply across the country, official sources said.

The BPDB sustained the tariff deficit on account of selling electricity to the bulk consumers at lower rates than the production/purchasing costs, they mentioned.

In a letter, the Power Division has requested the Finance Division to take necessary steps to urgently allocate the said amount of fund as subsidy in favor of the BPDB.

Usually, the BPDB procures electricity from the independent power producers (IPPs) and rental power plants. Apart from that, it also imports electricity from India at higher prices.

The government owes a sum of Tk 36.23 billion to the BPDB in subsidy until June last following the sale of electricity at lower prices than its procurement or production costs.

Of the amount, a proposal for allocating Tk 9.20 billion worth of outstanding subsidy for eight power plants is now under consideration of the Cabinet Committee on Government Purchase (CCGP)'s.

The government has set a target of allocating a total of Tk 350 billion as power subsidy for the current 2025-26 fiscal year.

When contacted, a Finance Ministry official told the FE the BPDB's request is now under processing.

With the financial assistance from the government, it is possible to maintain electricity supply through making monthly payments against the electricity bills of IPPs and rental power companies.

Besides, advance payment has to be made to the state-owned Bangladesh Petroleum Corporation (BPC) for ensuring smooth supply of fuel-oil to the power producers, the Power Division said in the letter.

It further said it is also necessary to make sure of the required supplies of fuel-oil and coal in order to continue uninterrupted power supply in the ongoing summer.

Keeping this in view, the power producers had already requested the BPDB on several occasions to ensure timely payment of their outstanding electricity bills, an official of the power division said.

Taking the overall situation into consideration, the BPDB in its letter sought the finance ministry's necessary steps to release the subsidy or tariff deficit on an urgent basis.

Without making the payments of outstanding bills to the IPPs and rental-based power generating companies, it will be difficult to smoothly operate power generation activities, the official said, adding that electricity purchase from India may face a blow also.

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