Anisul Islam Noor :
The Bangladesh Power Development Board (BPDB) has to bear a big loan burden of Tk 39,610 crore at three percent interest, sources said.
The government lent the money to BPDB at three percent interest to offset losses incurred mainly due to purchase of costly electricity from rental and fuel oil-fired power plants, BPDB data shows.
The government, according to tariff orders issued by Bangladesh Energy Regulatory Commission, was supposed to give the amount as subsidy, not as loan.
The annual interest on the loan raised the cost of bulk electricity supply by Tk 0.21 per unit or kilowatt-hour in the past financial year, said a responsible official of BPDB’s commercial wing.
The effect of interest on power supply cost would increase further by the
end of the current financial year with increased amount of loan outstanding, he added. At a BERC public hearing on September 25, the PDB sought a power price hike by Tk 0.58 for each unit of bulk electricity.
State Minister for Finance and Planning MA Mannan said that the government had been funding the BPDB at three per cent interest to offset its losses and it would continue to do so.
When asked if the government should bear the responsibility for the losses incurred by the BPDB for buying electricity from rental power plants, he said, ‘The energy commission is there to address the matter.’
Consumers Association of Bangladesh Energy Adviser M Shamsul Alam, however, said that neither the BPDB nor the consumers should bear the responsibility for the loan or its interest as the BPDB had to borrow the money to implement the government policy to buy expensive electricity.
‘The government ignored all the plans of the PDB and forced it to buy electricity at pricey options, like rental power, leaving cheaper options unused,’ he said, adding that in many cases the government forced the board to buy excess quantum of electricity from particular companies to serve vested interests.
Besides, the government was flouting laws by lending to the power board instead of giving money as subsidy, Shamsul Alam said.
Between March 2010 and September 2015, citing high prices of fuel oils and growing dependence on them, the commission raised the bulk price of electricity by 106.75 per cent, leading to an average hike in retail power prices by 69.25 per cent, up from Tk 3.76 per kilowatt-hour or unit to Tk 6.33.
In a mega plan introduced in 2010, the government promised that the price of electricity would be reduced from 2014 as the dependence on rental and liquid fuel-based power plants would be lowered by then.
The government, however, continued to charge high for fuel oils and increased dependence on expensive short-term power plants, leading to a rise in power board’s losses.
Shamsul Alam opined that the PDB could save Tk 0.49 per unit if the government reduced prices of diesel and furnace oil for power generation in line with the international market.
He added that the PDB could save Tk 855.80 crore and Tk 1,301.41 crore annually through using least-cost options in power generation and rationalising capacity payment to rental power suppliers under extended contracts respectively.
The Bangladesh Power Development Board (BPDB) has to bear a big loan burden of Tk 39,610 crore at three percent interest, sources said.
The government lent the money to BPDB at three percent interest to offset losses incurred mainly due to purchase of costly electricity from rental and fuel oil-fired power plants, BPDB data shows.
The government, according to tariff orders issued by Bangladesh Energy Regulatory Commission, was supposed to give the amount as subsidy, not as loan.
The annual interest on the loan raised the cost of bulk electricity supply by Tk 0.21 per unit or kilowatt-hour in the past financial year, said a responsible official of BPDB’s commercial wing.
The effect of interest on power supply cost would increase further by the
end of the current financial year with increased amount of loan outstanding, he added. At a BERC public hearing on September 25, the PDB sought a power price hike by Tk 0.58 for each unit of bulk electricity.
State Minister for Finance and Planning MA Mannan said that the government had been funding the BPDB at three per cent interest to offset its losses and it would continue to do so.
When asked if the government should bear the responsibility for the losses incurred by the BPDB for buying electricity from rental power plants, he said, ‘The energy commission is there to address the matter.’
Consumers Association of Bangladesh Energy Adviser M Shamsul Alam, however, said that neither the BPDB nor the consumers should bear the responsibility for the loan or its interest as the BPDB had to borrow the money to implement the government policy to buy expensive electricity.
‘The government ignored all the plans of the PDB and forced it to buy electricity at pricey options, like rental power, leaving cheaper options unused,’ he said, adding that in many cases the government forced the board to buy excess quantum of electricity from particular companies to serve vested interests.
Besides, the government was flouting laws by lending to the power board instead of giving money as subsidy, Shamsul Alam said.
Between March 2010 and September 2015, citing high prices of fuel oils and growing dependence on them, the commission raised the bulk price of electricity by 106.75 per cent, leading to an average hike in retail power prices by 69.25 per cent, up from Tk 3.76 per kilowatt-hour or unit to Tk 6.33.
In a mega plan introduced in 2010, the government promised that the price of electricity would be reduced from 2014 as the dependence on rental and liquid fuel-based power plants would be lowered by then.
The government, however, continued to charge high for fuel oils and increased dependence on expensive short-term power plants, leading to a rise in power board’s losses.
Shamsul Alam opined that the PDB could save Tk 0.49 per unit if the government reduced prices of diesel and furnace oil for power generation in line with the international market.
He added that the PDB could save Tk 855.80 crore and Tk 1,301.41 crore annually through using least-cost options in power generation and rationalising capacity payment to rental power suppliers under extended contracts respectively.
