BIPPA warns of summer power shortage over unpaid bills

Bangladesh Independent Power Producers’ Association (BIPPA) has urged the government to pay at least 60 per cent outstanding dues to private power plants before Ramadan, warning of severe electricity shortages in the looming summer if immediate action is not taken.

“The payments against the bills of 8 to 10 months are pending to be cleared. We are in big trouble to continue operation, facing severe financial crisis, as per our calculation, the total amount of the pending bills will be around TK 14,000 crore,” former BIPPA president Imran Karim told at a press briefing at the Sonargaon Hotel in Dhaka on Monday.

BIPPA president KM Rezaul Hasanat, former president, BIPPA’s directors Navidul Haque and Faisal Ahmed Chowdhury were present.

Taking part in the discussion, BIPPA president KM Rezaul Hasanat said, despite contracts stipulating a maximum payment delay of 30 days, the Power Development Board (PDB) has reportedly been defaulting on payments for several months, he urged swift action before holy Ramadan as the private sector have faced prolonged arrears.

“If we are not able to open LC as soon as possible to procure fuel from abroad it will be a challenge to ensure smooth supply during Ramadan,” he said.

Usually, BPDB purchases electricity worth Tk 4,000 crore per month.

Currently, Bangladesh is generating between 9,000 and 10,000 megawatts, or MW of electricity, with only 400 to 600 MW coming from liquid fuel-based power plants. However, as the summer season approaches, the demand from this sector is expected to surge, requiring at least 4,000 MW of electricity to be supplied from these plants.

“We have met with the government three times since December to convey our concerns,” Hasanat said.

BIPPA officials said the delay in payment is not the only problem that the private power producers are facing.

“The shooting trend in dollar price, unavailability of the green backs with banks and counting penalties for delayed payment to foreign lenders and equipment suppliers have been the major problems,” said BIPPA president.

He noted that some of the letters of credits (LCs) were opened with the banks a few months back, calculating the US dollar at a lower rate and due to this we have lost Tk 8,000 crore by this time. He said, adding that some banks do not even sell dollars at the government’s fixed rates.

He also mentioned that many foreign banks charge IPP operators for delay in their repayments while equipment suppliers are also doing the same practice.

Speakers at the event warned that the summer season could begin as early as March, underscoring the need for immediate action. They stressed that initiatives must be taken now to ensure liquid fuel-based power plants are fully operational in time to keep up with the increased demand.