Tariff method review planned

In a bid to ensure compliance with the recommendations from the International Monetary Fund (IMF) to cap Operation and Maintenance (O&M) expenses of the private power plants, Power Division of Bangladesh plans to introduce revised tariff calculation method to guide future contracts.

In December 2024, IMF advised capping O&M expenses, return on equity (RoE), and heat rate for privately owned plants. The IMF also suggested raising consumer power tariffs if cost-cutting measures fail.

"The Power Division sought an extension to submit electricity tariff approvals for eight power plants, including the 1,320MW Rampal coal-fired to the Advisory Committee on Public Purchase," official said.
Nine power plants, including Rampal, are running without tariff approval, officials confirmed.

"We are reviewing the tariffs of these power plants. Once the review is complete, the Power Division will submit the PPAs for approval," a senior official said.

Meanwhile, the Finance Division withheld subsidies for the plants due to pending power purchase agreement (PPA) approvals and asked the Power Division to complete the process by July 2025.

Following the report, the power and energy adviser ordered an investigation, however, the Power Division said it is reviewing tariffs for Independent Power Producers (IPPs) and Rental Power Plants (RPPs) to reduce generation costs. 

Power Division has asked joint venture and publicly owned plants to cut the national RoE from 12 per cent to 6 per cent and to curb other cost components to limit tariff hikes. 

In a June 17, 2025 letter, the Finance Division said that while Tk 3,696 crore in subsidies had been released, Tk 5,056.89 crore earmarked for the nine non-compliant plants remained frozen.

The eight plants still without PPA approval are 1,320MW Rampal Power Plant (Bangladesh-India JV), 1,320MW Patuakhali Power Plant (RPCL-Norinco JV), 210MW Mymensingh Power Plant, 52.194MW Kodda Power Plant, 25.50MW Rowzan Power Plant, 105MW Gazipur Power Plant, 163MW Mirsharai Power Plant, and 150MW Kodda Power Plant.

Later, the 68MW Sirajganj Power Plant was dropped from the list after receiving Cabinet Committee approval.