Home Bangladesh 20 pc of REB loan to be spent for interest payment
Bangladesh - April 24, 2024

20 pc of REB loan to be spent for interest payment

Farhad Chowdhury: Bangladesh Rural Electrification Board (BREB) is implementing projects to supply electricity to rural areas of the country with loans from various sources. Among them, the amount of foreign debt is the highest. Every year, therefore, a large part of the total expenditure of the organization goes towards debt and interest payments. This time more money will be spent in this sector.
According to REBs revised budget, in the current fiscal year (2023-24), interest payments on loans will account for 20 percent of the total expenditure of the organization. Officials of the company said that due to the end of the grace period and the adjustment of the previous years liabilities, more money will be spent on interest this time.
The revised budget of REB for the current financial year has been finalized recently by the Ministry of Finance. It can be seen that in the financial year 2023-24 the cost of the organization will be Tk 183.83 crore. In the approved budget of the current financial year, however, it was Tk 122.42 crore. According to the revised budget, REB will repay the debt of Tk 378.10 crore in the current financial year, whereas the amount in the approved budget was Tk 376.90 crore.
In the approved budget of the current financial year, the total expenditure of REB was estimated at Tk 564.24 crore. It was estimated at the time that 21.70 percent of the money would be spent on interest.
However, in the revised budget, it is estimated that 20.24 percent of the total expenditure of the organization will be spent on interest. In this case, the total expenditure has been estimated at Tk 908.33 crore.
If you want to know BREB Controller (Finance and Accounts) Md. Hossain Patwari told, “When the budget was made before the beginning of the financial year, the interest expense was calculated according to the amount of debt to be repaid. In the meantime, the grace period of several of our project loans has ended. As a result, their interest expenses have also been added to it. This additional interest has also been added to the revised budget. Besides, there is some liability for last years interest. Due to this, interest expenses will increase in the current financial year compared to last year. However, this is not the final calculation, the amount may decrease or increase at the end of the fiscal year.
According to the financial report of BREB, in the financial year 2022-23, the organization has repaid loans of Tk 376.90 crore and interest of Tk 120.95 crore. In the previous financial year, the debt of Tk 232.75 crore and interest of Tk 124.48 crore has been paid. In the financial year 2020-21, BREB paid Tk 235.21 crore loan and Tk 140.73 crore interest. In the previous financial year, the company paid Tk 321.81 crore in debt and Tk 102.33 crore in interest.
In the current financial year, apart from the interest expenses, the majority of the total expenses of BREB will be spent on office expenses, employee salaries and facilities. Out of this, 46.91 percent will be spent on office expenses, 13.85 percent on salaries and 10.88 percent on employee welfare and facilities.
In the approved budget of the current financial year, it was estimated that BREB would receive a loan of Tk 908.62 crore. In the revised budget, its amount has increased to Tk 1,520.51 crore. At the end of June 30 last year, the companys total long-term debt was Tk 11,494 crore. Out of this, the foreign debt was Tk 11,035 crore. In the financial year 2022-23, the total income of BREB was Tk 1,704 crores. Whereas in the previous financial year the income was Tk 843 crores. In the financial year 2022-23, the net profit after tax of the organization was Tk 987.83 crore, which was Tk 192.88 crore in the previous financial year.
In the current financial years Annual Development Program (ADP), BREB has allocated Tk 4,000 crore for seven projects. However, in the revised ADP, its amount has reduced to Tk 1,782 crore. Out of this, government is Tk 108 crores, project aid is Tk 1,154 crores and organizations amount is Tk 519 crores. In the first nine months of the current financial year (July-March) Tk 820 crores have been spent on these projects. At that time the physical progress rate of the project was 48.36 percent.
At present there are total 80 Rural Electricity Societies under BREB. Its number of approved projects is 84. The organization includes 61 districts. At present, the number of subscribers of BREB is Tk 3 crore 57 lakh 73 thousand 754. The companys highest electricity demand was 9,811 MW on April 7. On this day, BREB received 58 percent of the countrys total national production. Its system loss is 8.56 percent.

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