The government of Bangladesh urgently needs to review the deal with India’s Adani Group, for the sake of the power sector in the current cash crunch. Most officials of the state-owned Bangladesh Power Development Board (BPDB) strongly believe this, noting that the government needs to pay $100 million every month to import electricity from the Adani power plant in Jharkhand. “If the Adani deal is reviewed, and the tariff is reduced, the government can save upto 50 percent of the money it now pays to Adani,” a senior BPDB official told UNB, requesting anonymity as the issue is highly sensitive. The government signed a 25-year power purchase agreement (PPA) in November 2017 with Adani Power under an unsolicited offer, to buy electricity from its 1600 MW power plant in Godda of Jharkhand. It started importing electricity from the plant in April 2023. Besides the Adani plant, Bangladesh has also been importing about 1160 MW of electricity from India, of which about half is from the Indian private sector and the other half through the government arrangement. All are from coal-fired, or thermal power plants. Read more: No reason to get affected ties with India: Foreign Affairs Adviser BPDB officials said currently this import costs about Tk 5.50 per unit (kilowatt hour) from Indian state-owned plants, Tk 8.50 per unit from Indian private sector while Adani’s power costs about Tk 15 per unit. “It means import of electricity from Adani’s power plant costs almost double compared with the average cost of the import under the Indian government’s arrangement,” said the BPDB official. If the government wants to review the deal, this is the time to do the job, he added, saying that the review will bring huge financial benefits for Bangladesh. Many energy experts in Bangladesh have also been criticising Adani's deal. They said that currently, the BPDB needs to pay over $1.2 billion a year and over 25 years, the payment will be $30 billion. If the deal is reviewed, and the tariff is halved, the BPDB can save $15 billion in 25 years. At present, the outstanding bills of the BPDB amount to Tk 45,000 crore because of its purchase of electricity from the private sector and also import from India at a higher rate. Read more: Adani Group seeks new investment opportunity in Bangladesh Energy expert and vice president of Consumers Association of Bangladesh (BPDB) M Shamsul Alam said that the government should immediately take measures to review all unsolicited deals, including Adani’s one. Sources said that after huge criticism in Bangladesh, last year the Adani Group agreed to reduce the power tariff in exporting electricity. But the arrangement was made on an ad-hoc basis and every month the BPDB has to negotiate with the Indian company to set the power price. “But we need a permanent solution to this deal through a review,” the senior BPDB official told UNB.

As the country faces the impact of a powerful cyclone, the Ministry of Power, Energy, and Mineral Resources has urged everyone to follow these crucial electricity safety tips to stay safe: Avoid downed lines: Do not touch fallen wires. Report them immediately to the nearest electricity office. Report trees on lines: If you see trees or branches on power lines, notify the electricity office. Contact numbers can be found on your electricity bill. Read more: Cyclone Remal weakens into a land deep depression over Jashore, adjoining area Stay away from poles and wires: Refrain from touching electric poles or wires during storms. Meter safety: If your meter wire is damaged or touches your roof, report it without attempting to handle it yourself. Volunteer help: Assist electricity workers if they need help during the disaster. For assistance, call 16999 or reach out to the regional control rooms: Rural Electrification Board: 01792-623467, 02-8900575 West Zone Power Distribution: -- Barishal: 01713-850218 -- Khulna: 01713-850211 -- Patuakhali: 01713-850219        Read more: Cyclone Remal leaves 2.22 crore people without power

Bangladesh Power Development Board (BPDB) is going to bear the brunt after recent enhancement of US Dollar rate as it will have to spend an additional amount of over Tk 7,300 crore to purchase electricity from the private sector. According to official sources, the BPDB's annual spending was roughly calculated as Tk 104,000 crore for purchasing electricity from the independent power producers (IPPs) for the fiscal year 2023-24. The total expense will now go up to about Tk 1,11,300 crore, according to officials familiar with the estimate this week. But after the increase in the rate of USD by the central bank through the introduction of a crawling peg system, the BPDB has been a great victim of such a decision. The Bangladesh Bank on May 8 unveiled the crawling peg exchange rate system and allowed banks to buy and sell US dollars freely near Tk117, as well as letting go of its regulatory power of the Smart rate, and hiking the repo rate. 360 MW Haripur unlikely to get extension despite low cost electricity: Sources Under this system, a crawling peg mid rate (CPMR) has been set at Tk117 per US dollar with immediate effect. Scheduled banks may purchase and sell US dollars freely around the CPMR with their customers and in interbank deals, the notice also said. A crawling peg system is a method of exchange rate adjustments that allows a currency with a fixed exchange rate to fluctuate within a band of rates. It is a hybrid of fixed and floating exchange rate systems. "The payment mode of the power purchase agreements (PPAs) with the IPPS is in USD. So, we have to incur a huge financial loss when the USD rate goes up", a top official of the BPDB told UNB. As the issue is very sensitive, preferring anonymity, he said the BPDB's loss will be enormous this year as the dollar rate went up in one go by Tk 7 to Tk 117 from the Tk 110. He said the extra burden of paying Tk 7,300 crore will complicate the situation when the International Monetary Fund (IMF) has been insisting on reducing government's loss in buying electricity from the private sector. Differing reserve figures stirring market instability and consumer price hikes He noted that The BPDB has to spend over Tk 12 in each unit of power generation while its average selling rate is about Tk 8.95 with incurring over Tk 3 per unit. "The IMF has repeatedly been putting pressure on the BPDB to raise the electricity tariff to reduce the financial loss. Now, after enhancement of the USD rate, the financial loss will be tough to manage", said another official of the BPDB. He, however, said despite the pressure from the international lending agency, the BPDB has not taken any decision to raise the tariff shortly. Power and energy sector likely to get Tk 804 billion allocation in next two fiscal years "The Power Division and the BPDB have been making their own calculations about the impact of the USD rate enhancement. The final decision will come from the government if any decision is taken politically to raise the power tariff", added. The BPDB annual report reveals that as the single buyer in the power sector, the organisation's operating expense was Tk 93,797.37 in the fiscal year 2023-24.

Haripur 360 MW combined cycle power plant (CCPP), which generates electricity at lowest cost, is unlikely to get extension after completion of its 22-year initial contract period. According to official sources, the power plant, established by leading US company AES Corporation in 2001, completed its successful operational period in November 2023. Since then, the government has not taken electricity from the plant.    The AES Corporation developed two large base-load power plants—Haripur 360 MW CCPP in 2001 and Meghbaghat 450 MW CCPP in 2002—with the highest efficiency, but lowest cost.   As per the power purchase agreement (PPA), state-owned Bangladesh Power Development Board (BPDB) had been purchasing electricity from the two first generation independent power producer (IPP) plants. BPDB officials said that initially, Haripur's power tariff was Tk.1.56 per unit, which is the lowest not only in Bangladesh, but also in the world. According to a World Bank document publicly disclosed on June 24, 2014 which compared the power generation cost of different IPPS, shows that when the Khulna Power Company Limited was selling electricity to the BPDB at Tk 16.03 per unit in 1998, NEPC at Tk 20.20 per unit in 1999, Haripur was selling it at Tk 1.56 per unit and Meghbaghat was selling power at Tk 2.33 per unit. Read more: Bangladesh to provide 190 acres of land in Kurigram for Bhutanese investors; discussion to import hydropower underway Currently, the average generation cost is over Tk 10 per unit. Through a gazette notification issued on March 1, the government set the retail tariff of electricity at Tk 8.95. Officials said, until last year BPDB was buying electricity from the plant at Tk 3.32 per unit which was the lowest among all other private power plants. But in November 2023, the PPA expired and BPDB suspended purchasing electricity from the plant. The BPDB’s such move surprised many as it was unlikely on the part of the government that it unilaterally stopped buying electricity from the most efficient and lowest cost power when it continued purchase of electricity from high cost plants belonging to Summit Group and other plants. “Actually, there was no strong lobby on behalf of the Haripur plant to pursue the government to renew its contract with the BPDB. That’s why the country will be deprived of the low cost electricity,” a top official of the BPDB told UNB requesting anonymity. He, however, said the government can offer the owner-company of the Haripur plant to buy it and operate under the BPDB management. Read more: Power cuts plague Sylhet: Frustration growing among residents and businesses Sources said the USA-based AES Corporation developed the Haripur and Meghnaghat power plants, after a number of changes into their ownership. Now Malaysian Pendekar Energy Limited owns and operates the two plants.          In 2003, AES sold the plants to the UK company CDC Globeleq, which sold the plants to Malaysia-based Pendekar Group in 2007. Official sources said the government had to pay Tk 50-55 crore a month to purchase electricity from the Haripur power plant for its 360 MW electricity. “But from November 2022, the operator of the plant has not been receiving any bills from the BPDB for which it lost interest to continue its operation”, said another source. He also mentioned that BPDB is also not interested to extend its operation as it has  contractual obligation to buy electricity from newly established plants like Summit Group’s Meghnaghat Plant, Unique Group’s Meghnaghat plant and also some coal –fired power plants which electricity cost is between Tk 6.50 to Tk 30 per unit. Read more: First private sector solar project in Bangladesh secures $121.55 million funding from ADB

The Asian Development Bank (ADB) has signed a $121.55 million financing package with Dynamic Sun Energy Private Limited to build and operate a 100-megawatt (MW) grid-connected solar photovoltaic power plant in Pabna, Bangladesh.  The plant is the country’s first private sector utility-scale solar facility to secure support from global financiers, said the Manilla-based lending agency on Monday (April 29, 2024).  ADB arranged, structured, and syndicated the debt package as the sole mandated lead arranger and bookrunner.  The financing package comprises a $46.75 million loan from ADB, a syndicated B-loan of $28.05 million from ILX Fund I, an Amsterdam-based emerging market private credit fund focused on supporting the Sustainable Development Goals with ADB as lender of record, and a syndicated parallel loan of $46.75 million from the Japan International Cooperation Agency.  Competition policy can unlock increased FDI flows into Bangladesh: ADB Country Director to MCCI “As Asia’s climate bank, ADB welcomes the opportunity to support renewable energy in Bangladesh, where obtaining long-term financing for such projects is a challenge,” said ADB Private Sector Operations Department Director General Suzanne Gaboury. “This partnership exemplifies our lead role in mobilising financing for clean energy facilities and stimulating further investment in sectors where it’s needed the most.” The solar power plant will generate 193.5 gigawatt-hours of electricity annually and avoid 93,654 tons of carbon dioxide emissions annually. “We are delighted to secure financing for one of the largest private sector solar projects in Bangladesh to date, with the support of international lenders led by ADB,” said PT Managing Director Shakhawat Hossain.  “Partnering with an internationally reputable financial institution such as ADB affirms PT’s dedication to sustainability and marks a significant stride in our journey towards sustainable growth.” Banks tailoring offshore services with lucrative benefits aimed at wealthy NRBs DSE is owned by Paramount Textile PLC (PT), one of the largest woven textile manufacturers in Bangladesh, which also operates several power plants.  PT manufactures high-quality yarn-dyed and printed woven fabrics using a wide range of yarns, modern weaving technologies, and print types.  PT was publicly listed on the Dhaka and Chittagong stock exchanges in 2013. 

In Sylhet city, frequent power outages are affecting the daily lives of its residents and the local economy. The city has experienced severe load shedding in recent days, impacting traders and disrupting the water supply managed by the city corporation. Experts attribute the problem to a significant shortfall in power supply. The Sylhet region faces a gap, with demand ranging from 140-160 MW against a supply deficit of 40-60 MW. Shielding capital Dhaka from loadshedding masks reality of power cuts biting nation The Sylhet Power Development Board's records reveal stark disparities: on April 2, demand hit 141 MW against a mere supply of 56 MW; April 3 saw demand at 120-130 MW with only 66 MW supplied; and on April 4, the supply was just 69 MW against a demand of 135 MW. As Eid-ul-Fitr approaches, traders, in anticipation of the festive rush, have decorated their establishments, only to rely on generators amidst the frequent outages. The disruptions have also inconvenienced residents during crucial times like Sehri and Iftar. Zakir Ahmed, a local trader from Golapganj, voiced the community's distress, stating, “General people and businesses are the worst sufferers, and we fear the power cut problems will only worsen with the summer heat.” Echoing the sentiment, Airin Sultana Nipa, a housewife from Lala Dighirpar, shared her struggles, “The power goes out before dawn, causing water shortages at critical moments like Iftar and Sehri. It's disheartening to face such challenges.” Days of sweltering heat, power cuts in northern India overwhelm hospitals as death toll climbs Jarjisur Rahman Rony, an assistant engineer at the Sylhet Power Development Board, shed light on the dilemma, “We're distributing what little electricity we have. The issue isn't with the infrastructure but stems from broader economic challenges affecting power generation, such as the dollar and coal crisis, forcing us into load shedding.”

Foreign Minister Hasan Mahmud on Sunday said Bangladesh will allocate 190 acres of land in Kurigram for a special economic zone for Bhutanese investors. He said Bangladesh wants to import hydropower from Bhutan and a tripartite agreement is required to bring the electricity through India. "We are in discussion to that end," he told reporters at the Ministry of Foreign Affairs on Sunday. He said Bhutan has a potential of producing 25,000 megawatts of hydropower. The Foreign Minister said Bangladesh will also import hydropower from Nepal and things are settled regarding that initiative. Hasan said Bangladesh will construct a Burn and Plastic Surgery Unit in Thimphu as a goodwill gesture which also demonstrates the country’s capacity. He also briefed about the visit of the Bhutanese King Jigme Khesar Namgyel Wangchuck. Three new MoUs will be signed between Bangladesh and Bhutan while another MoU on cultural exchange will be renewed, said the Foreign Minister. The new MoUs will be on establishing a Burn and Plastic Surgery Unit in Thimphu, Specialized Economic Zone in Kurigram and technological cooperation consumers’ rights protection.   The King, along with Bhutanese Foreign, Health, Industry and Commerce Ministers and the Bhutanese Queen, is scheduled to arrive on Monday morning on a four-day visit demonstrating the strong relations that Bangladesh and Bhutan have developed steadily since 1971. "We have multifaceted relations with Bhutan," Minister Hasan said, adding that there is scope for boosting trade through transit and signing preferential trade agreement (PTA) with Bhutan.   President Mohammed Shahabuddin and the First Lady will receive the King amid gun salute and guard of honour. The King is scheduled to arrive at Hazrat Shahjalal International Airport at 10 am on Monday by a special flight, a senior official told UNB. This is going to be the first VVIP visit to Bangladesh after the formation of new government following January 7 national election. After the ceremony at the airport, he will go to Bangabandhu Memorial Museum at Dhanmondi 32 to pay tribute to Father of the Nation Bangabandhu Sheikh Mujibur Rahman. On Monday afternoon, the Bhutanese King will have a meeting with Prime Minister Sheikh Hasina at her office. They will have a one-to-one meeting. Foreign Minister Hasan Mahmud will meet the King at his place of residence the same day before the meeting with the Prime Minister. On Tuesday, the King will visit the National Martyrs’ Memorial at Savar. The King will also visit Sheikh Hasina National Institute of Burn and Plastic Surgery. He will visit Bangabhaban where he will be received by the president and the first lady. The King will have a meeting with the president at 4:30 pm on Tuesday. The president will host iftar and dinner in honour of the visiting royal. On Wednesday morning, the Queen Jetsun Pema Wangchuck and selected Bhutanese delegation members will leave Bangladesh for Bhutan by a special flight. Bangabandhu's daughter Sheikh Rehana and Foreign Secretary Masud Bin Momen will see them off at the airport. The Bhutanese King will visit Padma Bridge and Bangladesh Special Economic Zone in Araihazar, Narayanganj. On Thursday, the King will visit Kurigram Special Economic Zone. He will leave Bangladesh territory for Golakganj, Assam via Sonahat Land Port on Thursday afternoon. Khalid Mahmud Chowdhury, state minister for shipping, will see him off there. The 4th King of Bhutan, Jigme Singye Wangchuck, sent a letter of congratulations to the prime minister recently saying under her dynamic and strong leadership, Bangladesh has enjoyed peace, stability and unprecedented economic development. He also termed Bhutan as a "close friend" and rejoiced with the people of Bangladesh on this occasion. Bhutan was the first country to recognise the newly independent Bangladesh on December 6 in 1971 when the 3rd King of Bhutan sent a message of recognition by telegram. Since then Bangladesh and Bhutan share a special multidimensional bilateral relationship. Immediately after the independence, the Bhutanese government took initiative to establish diplomatic relations with Bangladesh and, consequently, formal diplomatic relations was established on 12 April 1973.

Power tariff will be increased from February 1 instead of March 1, said State Minister for Power, Energy and Mineral Resources Nasrul Hamid on Thursday (February 29, 2024). Gazette notification will be issued today in regard to the power tariff adjustment, he said while briefing reporters at his ministry. Earlier he said the new tariff will come into effect from March 1. He said the power tariff will be hiked between Tk 0.34 and Tk 0.70 per unit for all kinds of consumers depending on their volume of consumption while gas price will go up by Tk 0.75 per unit only for power plants. Govt raises gas prices for power plants by Tk 0.75 per unit He also said that a dynamic fuel pricing will be introduced for the consumers from March 1 under which price of petroleum fuel will go up and down in line with international market price. “Each month fuel price will be declared for the consumers”, he said adding neighbouring India do this every day. He noted that the steps have been taken to minimise the government losses caused by the increase in dollar rate. “This year the government will incur loss of Tk 43,000 crore due to sale of electricity at lower price,” he said. This step has been taken as part of the government move to come out of the subsidy now being given to the power sector, said the minister. According to the BPDB’s Annual Report 2022-23, the fiscal year saw the production of 87,024 million kilowatt hours of electricity at a total cost of TK 98,646 crore.    Its per unit production cost was Tk 11.33, while it was selling electricity at Tk 6.7 per unit — incurring a loss of about Tk 4.63 per unit. Electricity price to go up from March 1: Nasrul This imbalance has led to a staggering loss of Tk 47,788 crore for the fiscal year, as the government grapples with purchasing power from private and international sources at significantly higher rates. With this huge loss, the government has been facing great trouble as it has to purchase electricity worth Tk 82,778 crore from private sector power producers, while it generates electricity worth Tk 13,307 crore from its own generation plants. The annual report also shows that the BPDB’s average per unit production cost from its own plants is Tk 7.63, while it is Tk 14.62 at the independent power producers or IPPs (private sector), at rental plants Tk 12.53, at public plants Tk 6.85, and imported power from India at Tk 8.77. The government purchases electricity from the private sector and India in dollars. Read more: Bangladesh seeks ITFC cooperation to modernise power distribution, transmission system

The government of Bangladesh is caught up in a dilemma in choosing the right option to reduce the gap between the cost of power production and revenues generated from sales. “Top policymakers are divided over whether the government should go for increasing the power tariff further or issuing more bonds through the banking system,” said a top official at the state-owned Bangladesh Power Development Board (BPDB). He said if the government wants to raise the power tariff, either it has to do it before Ramadan or after Ramadan - these are the questions almost every day that are being discussed at the policy level. They are also analysing the impacts of floating more bonds to reduce the burden of soaring losses on the part of BPDB, he added. Read: Retail power tariff hiked 5% to Tk0.19 per unit for lifeline consumers, Tk0.36 on average for others According to official sources, currently, the production of each unit of electricity costs about Tk 12 while it sells at a rate of about Tk 6.7. It means the government has to bear the brunt of Tk 5.3 per unit, a top BPDB official told UNB.      The BPDB’s Annual Report 2022-23 shows, the BPDB, as a single buyer, generated 87,024 million kilowatt hours of electricity in 2022-23 fiscal at a total cost of TK 98,646.42 crore. Its per unit production cost was at Tk 11.33 while it was selling electricity at Tk 6.7 per unit incurring a loss of about Tk 4.63 per unit. The bulk tariff was last raised by 8.06 percent to Tk 6.70 from Tk 6.20 per unit on January 31 with effect from February 2023.  Read more: Over 10,000MW power in 29 projects in the pipeline, despite yawning overcapacity Against this, its revenues were Tk 50,858.25 crore, incurring a loss of Tk 47,788.17 crore, showed the BPDB Annual Report. With this huge loss, the government has been in great trouble as it has to purchase electricity worth Tk 82,778.25 from private sector power producers while it generates electricity worth Tk 13,306.62 crore from its own generation plants. The annual report also shows that the BPDB’s average per unit production cost from its own plants is Tk 7.63, while it is Tk 14.62 at the independent power producers or IPPs (private sector), at rental plants Tk 12.53, at public plants Tk 6.85 and imported power from India at Tk 8.77. The government purchases electricity from the private sector and India in dollars. Read more: Power generation capacity increased by almost 20% to cross 30,000MW in 2023 According to official sources, the government's cumulative outstanding bills have now jumped to about $5 billion, of which the backlog amount in the power sector is about $4 billion (about Tk 43,093 crore), and the remaining $1 billion is in the energy sector. State Minister for Power, Energy and Mineral Resources Nasrul Hamid also admitted the severity of the crisis. “Actually the crisis is not of local currency. Somehow we can manage it. But the main crisis is the dollar. We’re not getting dollars from Bangladesh Bank as per our needs,” he recently told UNB. He noted that the power and energy sectors need at least $1 billion a month to meet payment obligations. Read: Govt to raise retail power tariff this month In such a situation, the government recently introduced a number of bonds through Bangladesh Bank to facilitate the BPDB to clear some dues. “Initially, we have floated bonds worth Tk 5000 crore and it may go up to Tk 12,000 crore,” said a BPDB official on condition of anonymity, adding that it will not be enough to cover the losses, although the government is providing subsidies on a regular basis.     “That’s why the government will have to go for raising power tariff further or introducing more bonds,” he said adding, if more bonds are floated, it may squeeze the private sector’s credit from the banking sector.  But a final decision on what they would do still remains pending. Read more: Power, energy sectors are saddled with $5 billion outstanding payment amid dollar crisis: Sources

State Minister for Power, Energy and Mineral Resources Nasrul Hamid on Thursday said the demand for electricity may rise to about 17,500 MW in the coming summer. He, however, said that the currently total power generation capacity is 29,727 MW including that from captive and off-grid renewable energy. Environment minister calls for optimal execution of 'BEST' project to combat air pollution  “And the grid-based production capacity is 26,504 MW. Among them, natural gas-based production capacity is 11,350 MW (43 percent), furnace oil-based 6,492 MW (24 percent), diesel-based 826 MW (3 percent), coal-based 4,491 MW (17 percent), hydro 230 MW (1 percent ), solar power(grid) 459 MW (two percent) and imported electricity is 2656 MW (10 percent),” he said. Home Minister visits pavilions at World Defence Show The state minister said these in Parliament while responding to a written question of AL lawmaker elected from Chattogram M Abdul Latif. In fiscal year 2022-23, he said against the demand of electricity during summer, the generation on April 19 was 15,648 MW in the peak hours. Inflation will ease by end of current fiscal year: Finance Minister Due to reduced demand of electricity in winter, the maximum production of electricity this year has come down to 10,000 to 12,000 MW.