Pvt power producers getting addl Tk6,000cr

State-owned Bangladesh Power Development Board (BPDB) is paying about Tk 6,000 crore as “extra pay-ment” to the HFO-based independent power producers (IPPs) because of “excessive delay” in their due payments.

According to official sources, the payments are being made at the request of the Bangladesh Independent Power Producers Association (BIPPA), an organisation of the private power plant operators.

The BIPPA leaders said that as per the provision of the power purchase agreements signed with the BPDB, the private power producers should receive the payment against the purchase of electricity within a maxi-mum of 45 days or one and a half months.

“But now our payments are getting delayed and remain pending for about five months,” said Imran Karim, former president of BIPPA and vice-chairman of Confidence Group, one of the leading IPPs producing elec-tricity for the national grid.

BIPPA leaders said that the private power producers received the last payments against partial bills of Oc-tober 2022.

“Since November 2022, no payment has been received against the bills until now,” said another BIPPA leader.

According to official sources, the government has been experiencing a difficult situation in paying IPPs against its purchase of electricity for the national grid.

The country’s 55 per cent of electricity comes from IPPs which the BPDB purchases under the power pur-chase agreement (PPA).

The BPDB’s payment crisis deepened in the first half of last year and such outstanding payments stayed at Tk 20,000-25,000 crore for more than a year. To ease the crisis, the government raised electricity tariff a number of times in the last five months, but no significant improvement has been made in this regard be-cause of the recent dollar crisis, said the sources at the BPDB.

They said that most private banks regret opening any fresh letter of credit (LC) to import fuel or spare parts while the Bangladesh Bank is also found to be reluctant in allowing banks to open fresh LC for any import.

Banks are also charging interest against any default in the loan repayment, they said.

In such a situation, the BIPPA initially wrote a number of letters to the BPDB and the Power Division to clear their outstanding bills to facilitate the private power producers to import fuel, lube oil, spare parts and repayment of bank loans.

But finding no major progress in this regard, the BIPPA finally requested the BPDB to suspend the counting of liquidity damage (LD) against the “excess outage by the private power producers” from May 2022.

It means, a top BPDB official said, if the private power producers fail to operate their plants as per the con-tract, the BPDB will not claim any LD and the IPPs will get full capacity payment without any deduction in the bills.

As a result, the BPDB will have to pay an extra about Tk 3,000 crore in six months for losing its authority to deduct any amount from the capacity charges and bills despite any failure in the operation of the IPPs, he said.

An official document, seen by UNB, shows that entertaining the request, the BPDB in its board meeting on November 28, 2022, decided to suspend the “counting of LD against excess outage of the HFO-run power plants of the private operators from July 2022 to December 2022.”

“We have calculated that in the first six months, the due amount of the capacity payment against HFO-run plants is about Tk 3,000,” the official said, adding that until the recent order for resuming operation, the total due capacity payment will cross Tk 6,000 crore.