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Bangladesh’s Pre-Election Move: Settling Hundreds of Millions in Power Bills

Bangladesh’s Pre-Election Move: Settling Hundreds of Millions in Power Bills

Bangladesh is prepared to pay its outstanding debts to LNG suppliers, foreign oil companies (IOCs), and owners of power plants on a monthly basis commencing in July of about 960 million dollars. Just before the nation’s forthcoming elections, the prime minister, Sheikh Hasina, gave this decision the go-ahead.

Every week, the Bangladesh Power Division will put aside 160 million dollars to pay off loans owed to owners of power plants, while the Energy and Mineral Resources Division (EMRD) would be reimbursed with 80 million dollars. This action intends to guarantee the nation’s steady supply of natural gas. In order to guarantee a constant supply of electricity, the Power Division of MPERMAR has also asked for approximately 5.921 billion dollars for the fiscal year 2023–2024.

Despite its financial difficulties, Bangladesh is looking for assistance from international lenders to control its energy costs and prevent problems before the next general election in January 2024.

A 500 million dollar loan from Petrobangla is being negotiated with the Islamic Trade Finance Corporation at the moment.

The government owes over 2.4 billion dollars to private independent power producers as of June, as well as 350 million dollars to gas businesses, 320 million dollars to LNG suppliers, and 475 million dollars to India for electricity imports.

Bangladesh is working to entice international investors in addition to making good on unpaid debts.

The country’s first model for production sharing contracts tied to Brent crude recently received approval from the Cabinet Committee on Economic Affairs.

This new model, which is based on the profit-sharing formula, gives investors improved output shares and permits businesses to export natural gas after meeting domestic demand. The benchmark used to price LNG is connected to the model.

The government of Prime Minister Sheikh Hasina is still dedicated to growing the energy sector and finding success in this area, despite prior fruitless attempts to explore deep water gas reserves.

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