To run the fuel-oil-based power plants and to import LNG for supplying gas to the power plants in a proper manner, the Ministry of power, energy and Mineral Resources has sought $2 billion in subsidies and smooth dollar supply from the Finance Ministry.
Nasrul Hamid, the state minister for Power, Energy and Mineral Resources, met with Finance Minister Abul Hassan Mahmood Ali and sought the release of more dollars and the disbursement of subsidies on time on Sunday.
However, the Finance Ministry agreed to disburse about Tk 1,500 crore as cash support immediately as a temporary solution, and told the state minister that the Finance Ministry will issue another Tk 7,000 crore in bonds soon to pay the power sector dues. The rest of the amount will be disbursed later as arrears, but it is not clear when.
"This amount is needed to clear the dues and as working capital for import purpose," a senior official of the Ministry has said.
Of the $2 billion, $1 billion will go towards clearing dues of Indias Adani Power and Chevr on, which is producing gas from Bibiyana, the major gas field in Bangladesh. PDB owes Adani $700 million and Chevron $300 million. The rest of the amount will be used to pay the bills of fuel oils, liquefied natural gas and coal for power generation.
Earlier, the Bangladesh Power Development Board sought a Tk 35,000 crore subsidy for power generation for the current fiscal year.
As of March, Tk 18,000 crore has been disbursed in the form of bonds or cash. But the Power Division said the amount was insufficient and sought the rest of the amount before the end of fiscal 2023-24 in June.
When the payment stops for a while due to any crisis like dollar shortage, the figure piles up, he added.
Earlier in a briefing, Hamid said that uninterrupted power supply will depend on the disbursement of adequate dollars this year.
It has been said that the Bangladesh Bank is supplying a limited amount of dollars to maintain its foreign exchange reserves as per International Monetary Fund (IMF) conditions.
However, Bangladesh needed to maintain at least $19.27 billion in net foreign reserves at the end of March and $20.11 billion at the end of June to authorise the disbursement of the next tranche of the $4.7 billion loan from the Washington-based multilateral lender.
As of April 3, gross foreign exchange reserves stood at $19.65 billion, according to data from the BB. So the Power Division sought the Finance Ministrys direct intervention in this regard, sources said.
