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The Financial Express

Power and gas sector: PwC to assess impact of virus pandemic

| Updated: June 05, 2020 18:04:51


Power and gas sector: PwC to assess impact of virus pandemic

The government has hired the services of the international consultancy firm PricewaterhouseCoopers (PwC) to assess the impact of COVID-19 pandemic on power and energy sector.

The Ministry of Power, Energy and Mineral Resources (MPEMR) decided to make such an assessment with a view to preparing a strategic action plan for necessary remedy.

The MPEMR is also eyeing fiscal assistance from the development partners, namely, the World Bank (WB), the International Monetary Fund (IMF), the Asian Development Bank (ADB), the Asian Infrastructure Investment Bank (AIIB), and the International Finance Corporation (IFC) to overcome the pandemic-related losses.

"The PwC is now working to evaluate overall impact of the COVID-19 pandemic on power and energy sector," Power Cell Director General Mohammad Hossain told the FE on Tuesday.

He also said the state-run power and energy entities are also separately assessing impact of the ongoing pandemic on them.

The country's 66-day shutdown, which lasted until May 30, restricted almost all types of transportation including air, rail and public transports as well as movement of private vehicles with the exception of some essential services.

After May 30, offices and other business activities are opened by maintaining necessary safety procedure. Besides, public transport system is being operated in a reduced capacity, subject to their compliance with several health-safety guidelines.

Unlike operations of usual offices and businesses, the country's power plants and gas-fields had to be operated to meet the regular power and energy needs of commoners.

Due to the shutdown, electricity demand fell significantly to even less than one-third of the total installed capacity during peak hours. It caused the state-run Bangladesh Power Development Board (BPDB) to make huge payment to power plant owners as capacity payment charges for keeping their plants idle.

Amid the shutdown, the onslaught of super cyclone Amphan on May 20 left some 22 million electricity consumers across the country out of coverage.

Equipment worth over Tk 600 million were also damaged due to Amphan, mostly in the areas under Bangladesh Rural Electrification Board (BREB) and West Zone Power Distribution Company Ltd (WZPDC). Of the equipment, some 2,000 electricity poles, 800 transformers, 2,000 meters and 50,000 conductor connections were damaged.

However, the state-run power and natural gas distribution companies are not imposing any surcharge on electricity bill payments for the months of February, March, April and May, considering the clients' woes.

"We have estimated an initial loss worth Tk 150 billion in power sector alone due to the pandemic," said Mr Hossain.

The PwC's assessment will include all aspects of the impact, he hoped.

The state-run Petrobangla has not yet assessed any primary loss, caused by the pandemic. But, its subsidiary companies have been asked to do so, said a senior official.

The PwC is assessing the pandemic impact on Petrobangla and its subsidiary gas companies as well, he added.

The government has been providing subsidies to power and energy sector. The government provided Tk 522.6 billion as subsidies to power sector in last 10 years, said a senior Power Division official.

The volume of subsidy to the power sector has been on the rise with the installation of an increased number of 'expensive' oil-fired power plants.

The Petrobangla has also been receiving huge amount of subsidies after initiating the import of 'expensive' liquefied natural gas (LNG).

azizjst@yahoo.com

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