Written by The Banking Post
The Power Division has sought an urgent subsidy of Tk 24.48 billion to cover tariff deficits, warning that complications in opening letters of credit are disrupting coal and fuel imports and could threaten uninterrupted electricity supply.
Officials said the request was recently sent to the finance ministry in favour of the Bangladesh Power Development Board (BPDB) to help clear mounting arrears and stabilise power generation ahead of the national elections, Ramadan and the upcoming irrigation and summer season.
The funding shortfall has emerged as the government has yet to settle tariff deficits, even as one power plant has already been approved and two more are awaiting clearance from the Cabinet Committee on Government Purchase. BPDB incurs the deficit by selling electricity to bulk consumers at tariffs lower than its production and procurement costs.
BPDB purchases power mainly from independent power producers and rental plants, and also imports electricity from India. The subsidy arrears relate to the period from August to October 2025.
According to officials, outstanding dues include Tk 480 million to Rural Power Company Limited (210MW), Tk 14.69 billion to Bangladesh-China Power Company Ltd (1,320MW), and Tk 9.30 billion to Bangladesh-India Friendship Power Company Ltd (1,320MW).
A senior official said the subsidy was sought immediately to ensure reliable power supply during politically and seasonally sensitive periods. The funds would be used to clear overdue payments to power producers, continue fuel and coal imports, pay instalments for power plants and open letters of credit.
The finance ministry has confirmed receipt of the request and said it is currently under review.
For the 2025–26 fiscal year, the government has set a power subsidy allocation target of Tk 350 billion. Officials said timely disbursement would allow BPDB to make regular monthly payments to IPPs and rental power companies and maintain stable electricity supply.
The Power Division said the funds are also critical to securing adequate fuel oil and coal ahead of the summer peak. Power producers have repeatedly urged BPDB to ensure timely settlement of bills, warning that delays could disrupt generation.
BPDB officials cautioned that failure to clear outstanding dues could not only affect domestic generation but also put cross-border electricity imports from India at risk.
