Bangladesh power crisis: Its no secret that Bangladesh’s economy stands at the brink of collapse under the Muhammad Yunus-led interim government which came to helm after the toppling of former Prime Minister Sheikh Hasina in August last year. According to reports, Bangladesh is facing the threat of a nationwide power outage as the government has not been able to clear dues owed to various power producers, including India’s Gautam Adani-led Adani Group.
Bangladesh’s pending power bills and impending shortfall
As per a report by the Dhaka Tribune, state-owned Bangladesh Power Development Board, owes a staggering Tk 43,473 crore in power and gas bills to various independent power producers (IPPs), including Indian billionaire Gautam Adani-led Adani Group, and Petrobangla. Adani Power is owed Tk 10,309 crore, while local IPPs are owed about Tk 16,000 crore by the BPDP while joint-venture power plants, Pera and Rampal, are due Tk 10,000 crore, and Tk 7,164 crore to Petrobangla.
With summer approaching, Bangladesh’s power demands are set to surge exponentially, with Bangladesh Independent Power Producers Association (BIPA), issuing an ultimatum to the government to clear pending dues or face a shortfall of 3,500-4,000 megawatts in the coming months.
Blackouts, outages looming in summer
In a statement, BIPA chairman David Hasnat said that unless at the government clears at least portion of the Rs 16,000 crore dues to IPPs, it will be impossible to open letters of credit (LCs) to import fuel needed for power generation.
Notably, last summer, the peak power demand in Bangladesh reached 17,200 MW, with the government only managing to supply 15,500 MW on average, a shortfall of 2,000-2,200 MW.
With an estimated 6% annual increase in demand, BIPA estimates that power demand will rise to 18,232 MW in the coming summer from March to September. However, BPDB has not released an official demand-supply forecast for the upcoming season.
Pending dues less than reported
A senior BPDB official, who spoke on the condition of anonymity, claimed the actual dues to IPPs are less than what is being reported as the Yunus government recently paid Tk 8,000 crore to private power producers through bond issuance and other means, according to the Dhaka Tribune report.
The official said the government is prioritising full-scale power generation from coal-fired power plants this summer as they are currently more cost-effective than using imported gas, furnace oil or diesel.
State-owned plants relying on coal-fired plants
As per BPDB data, per unit power generation at furnace oil (HFO)-based power plants, which have a capacity of 6,442 MW, costs around Tk 16.40. In contrast, the cost of coal-based power generation is less than Tk 8 per unit, while imported gas-based power generation costs around Tk 18 per unit.
“Our focus will be on maximising generation from coal-based power plants with a capacity of 5,108 MW, followed by local gas-based plants using gas supplied by Petrobangla,” the official added.
Adani Power cuts supply
In November last year, Gautam Adani-led Adani Power reduced electricity supply to Bangladesh by 60 percent due to non-payment of bills amounting to over $800 million (around Rs 6,750 crore). Citing data from Bangladesh’s grid operator, a Reuters report had said that Adani Power reduced the supply to around 520 MW as it sought to recover the pending dues.
Earlier, Adani Power, which exports power to Dhaka from its dedicated 1,600 megawatt (MW) Godda plant in Jharkhand, had reduced supply to 700 MW-750 MW from around 1,400-1,500 MW in August. The company further reduced the supply to about 520 MW in early November, according to Power Grid Bangladesh data and a BPDB official, Reuters reported.
India-Bangladesh relations
India-Bangladesh relations are at an all-time low after the ouster of former Prime Minister Sheikh Hasina, and an interim government led by Nobel laureate Muhammad Yunus, coming to the helm in Dhaka.
Widespread communal violence against minorities in Bangladesh, especially Hindus, which has soured Dhaka’s ties with New Delhi, with the latter accusing the Yunus-led interim government of not doing enough, and turning a blind eye to the atrocities perpetrated by radical Islamist elements against the minority Hindu community in the country.
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