BPDB seeks Tk 5,587cr subsidy solely for Adani power imports

The Bangladesh Power Development Board (BPDB) has informed the Power Division that it will require around Tk465.56 crore in monthly subsidy solely to support electricity imports from India's Adani Power.

In a letter to the Power Division, the BPDB sought Tk5,586.69 crore in subsidy for Adani power imports in fiscal year 2026-27, citing the high cost of imported electricity. The requirement has been incorporated into the Power Division's subsidy proposal submitted to the Finance Division.

"We have a plan to import electricity worth Tk1,079 crore (US$90 million) per month. The subsidy burden is expected to remain around Tk450-466 crore during the same period," BPDB Chairman Engr Md Rezaul Karim said.

According to him, BPDB paid Tk13.83 per kilowatt-hour for electricity imported from Adani Power in the last fiscal year and continues to pay more than Tk13 per unit.

*    Higher fuel costs, gas shortages drive subsidy demand
*    Tk 465.56cr monthly subsidy needed solely for Adani
*    Adani power costs Tk 13.83/unit

The Power Division has sought a total Tk43,904.43 crore in additional subsidy for FY27, citing higher electricity import costs from India and Nepal, rising fuel prices and increased generation costs in the private power sector.

Power imports have become an increasingly important component of Bangladesh's electricity supply mix. The revised subsidy proposal covers electricity imported from India and Nepal, generation from the 163MW Tripura power plant and rental power plants.

Under the revised estimate, the government will require Tk43,904.43 crore in subsidies during FY27. In addition, it will pay Tk35,046 crore to independent power producers (IPPs). The monthly subsidy requirement is projected to range between Tk300 crore and Tk480 crore, depending on seasonal demand and import costs.

In its letter, the BPDB said the power sector is under mounting financial pressure due to higher electricity import costs, rising domestic generation expenses, increased natural gas prices, greater reliance on liquid fuel because of gas shortages and the depreciation of the taka against the US dollar.

Apart from Adani imports, the BPDB is also seeking Tk868.16 crore in subsidy support for electricity imported through two Indian grid connections and from Nepal, according to officials.

The proposal covers the period from July 2026 to June 2027 and aims to ensure uninterrupted electricity supply.

The revised subsidy requirement follows the Bangladesh Energy Regulatory Commission's (BERC) decision to raise bulk and retail electricity tariffs in May, prompting the authorities to recalculate the subsidy requirement. Before the tariff adjustment, the Power Division had sought around Tk59,144.77 crore in subsidy for the current fiscal year.

The proposal also noted that BERC raised the benchmark price of high-sulphur fuel oil (HSFO) to Tk113.54 per litre from May 18, further increasing power generation costs.

It said electricity generated by IPPs, state-owned power plants and imported sources is sold to distribution utilities at regulated bulk tariffs, leaving BPDB to bridge the gap between procurement costs and selling prices through government subsidies.

Earlier this year, a national committee formed by the interim government said Bangladesh had been paying an additional 4-5 US cents per kilowatt-hour for electricity supplied by Adani Power, costing the country an estimated US$400 million to US$500 million annually.

According to the committee, the excess payments could reach nearly US$10 billion over the 25-year term of the power purchase agreement for Adani's 1,496MW coal-fired power plant in Godda, Jharkhand, India.