Work to ensure energy efficiency

Bangladesh is more dependent on imported fuel because of its limited primary energy. Hence, policymakers need to work towards ensuring energy efficiency, said the chief of Bangladesh Independent Power Producers' Association (BIPPA).

"Given the limited quantity of primary energy, only the most efficient utilisation must be ensured. We are more dependent on imported energy rather than using our low-cost indigenous gas," said BIPPA President Faisal Khan as he shared his views regarding opportunities for the year 2024.

Transmission and distribution also require more investment to ensure quality electricity to industries, he said, adding that private sector investment in transmission and distribution would expedite development in the power generation sector.

Khan, also director of Summit Power International, one of the leading private power generators, said 2024 would be about survival of the Independent Power Producers (IPPs) as they are struggling to import fuel amid the dollar shortage and slow payment of overdue bills by the government.

"Local banks are struggling to source US dollars to settle the limited fuel import letters of credit, foreign loan repayments, and spare parts procurement. The power sector requires support from the Bangladesh Bank to ensure uninterrupted power generation," he said.

Apart from this, the government owes over Tk 25,000 crores to IPPs in monthly bills. Some plants have more than nine months of payment overdue, he said.

The BIPPA chief said the Bangladesh Power Development Board (PDB) makes partial payments each month from their revenue collection and support from the finance ministry.

The dues are building up because of non-release of funds allocated to the power sector during the national budget for the current fiscal year, according to Khan.

Consequently, he said, IPPs are suffering massively from forced loans and defaults on loans and other payments.

"IPPs are collapsing due to the huge receivables," he said.

He said IPPs are prepared to support the nation to meet its electricity needs but they alone do not have the capacity to ensure uninterrupted electricity without the US dollar support from the Bangladesh Bank and resolution to the cashflow crisis due to extremely delayed bill payments.

Khan said high interest rate on loans, inflation and disparity in the foreign exchange rate are the key challenges for businesses and the economy.

"We need to overcome these challenges to attract more foreign direct investments and ensure survival of local industries."