Prime Minister Sheikh Hasina has directed the Forex Reserve and Treasury Management Department of the Bangladesh Bank and the Finance Ministry to allocate dollars for making debt repayment and coal import-related payments for continuing the production in Payra and Rampal power plants.
"As per the directive the China National Machinery Import and Export Corporation will receive US$114 million and Rampal power plant authority $11 million on Wednesday. The situation will be overcome shortly," a senior official of the Power Division told the Daily Observer on Tuesday.
However, Prime Minister Sheikh Hasina will sit with the concerned officials on Wednesday to discuss the overall situation of the power and energy sector at her office.
"The private bank's recent decision not to facilitate coal projects is a big blow for us as our three big baseload power projects are coal fired, so this thing will be discussed in the meeting," an official said.
For the last two days, the Prime Minister's office (PMO) has conducted several meetings with the
power division, Finance Ministry and Bangladesh Bank to address the dollar crisis issue.
"The price of coal in the international market has risen 3 to 4-fold high, Bangladesh now needs to spend nearly four and a half times for a tonne of coal compared with the price paid in January 2021. On January 16, a tonne of coal cost $370 in place of $84 in January 2021," a senior official of the Power Division said.
However, we are facing a severe dollar crisis, so we need the government's high ups decision in this regard, we got the nod, there will be no crisis, the official added preferring anonymity.
Bangladesh in fact could not pay any coal import bill in 2022 for the Payra power plant, a joint venture between the NWPGCL and the China National Machinery Import and Export Corporation. The coal supply to the Payra power plant has been suspended since January 1 in 2023.
Bangladesh now owes $151 million to the Chinese corporation for the coal import for six months since January, according to the North-West Power Generation Company Ltd (Payra thermal power plant) Authority, it requires about 2.5 lakh to three lakh tonnes of coal per month. The monthly coal import payment is roughly $30 million.
However, the Rampal plant authority has also been compelled to suspend their operation as they could not place new coal import orders because of the dollar crisis. Their dues are $US16 million.
Earlier on November 13 in 2022, the Payra power plant authority wrote to the Forex Reserve and Treasury Management Department of the Bangladesh Bank and the Power Division for allocating dollars for making debt repayment and coal import-related payments to open letters of credit or LCs to import coal necessary.
"It was $114 million due on December 8 in 2022. But when Bangladesh-China Power asked the account bank - Sonali Bank - to make the payment, the bank said it was not in a position to provide such a huge amount of US dollars, later we wrote to the Power Division Secretary seeking help," said AM Khurshedul Alam, Chief Executive Officer of North-West Power Generation Company Ltd .
On January 14, the 620 MW Rampal thermal power plant authorities suspended electricity production less than a month after its opening, failing to buy coal because of the dollar crisis.
Anwarul Azim, Deputy General Manager of Bangladesh-India Friendship Power Company Ltd, said the production was suspended on Saturday (January 14) as Bangladesh Bank barred the company from placing import orders for coal due to the ongoing dollar shortage in the country.
Senior officials at BIFPCL said despite repeated requests and meetings, they could not get a nod from the central bank to open letters of credit or LCs to import coal necessary to run the plant.
The company raised the issue with the Power Division and Bangladesh Power Development Board.
"Since we are unable to pay, we are unable to import. We require at least 5,000 tonnes of coal for regular power production. We were forced to suspend production as we don't have enough coal," Anwarul said on Sunday.
"The government should immediately address the issue as energy is the backbone of economy, whatever the development we are enjoying, it is the outcome of our robust power generation capacity, we should continue the pace, otherwise it will dangerously impact our GDP growth and overall development," Dr M Tamim, the former energy adviser, said while commenting over the issue.
