Debt of Pyara power plant increased by 7pc even after payment

Zakir Mahmud Salim: The amount of loan taken for the construction of Payra power plant is $1.984 billion. China Exim Bank has to pay high interest rate for this loan under tough conditions. Last year the international rate of interest SOFAR (Secured Overnight Financing Rate) increased almost three times. This has increased the cost of interest payments. In addition, the real debt has also increased due to the increase in the dollar exchange rate. All in all, Payra Power Plant is in great danger with debt repayment.
According to the information, Bangladesh-China Power Company Limited (BCPCL) had 20 percent equity in the construction of Payra power plant. Of this, half or 10 percent is provided by Northwest Power Generation Company of Bangladesh (NDUPGCL). China National Machinery Import and Export Corporation (CMC) provides the remaining 10 percent. The remaining 80 percent is taken as a loan. The grace period of this 15-year loan is 4 years, which has to be repaid in 23 installments.
The interest rate at the time of taking the loan was 6 months LIBR + 2.98 percent interest. The interest rate was less than 5 percent. However, after the departure of Libor (London Interbank Offered Rate), SOFAR is currently being considered in determining loan interest. Currently, the interest rate stands at 6 months SOFAR + 2.98 percent interest. But last year Sofar increased to more than five percent. At present, the six-month SOFA stands at 5.37 percent. As a result, Payra Power Plant has to pay interest at the rate of 8.34 percent.
Meanwhile, the country’s dollar exchange rate has also increased. At the end of the financial year 2021-22, the dollar exchange rate was Tk 93.50. At the end of the financial year 2022-23 it stood at Tk 109.18. Currency devaluation losses increased by around 68 percent or Tk 976 crore in the last financial year due to increase in exchange rate. This has also increased the real amount of local currency loans. And increasing interest and loan repayment costs, the Power Development Board (PDB) has to pay more capacity charges for Pigeon.
According to BCPCL, the loan amount of Payra Power Plant at the beginning of the financial year 2021-22 was Tk 15,429.72 crore. In that financial year, the loss of exchange rate due to the devaluation of rupees stood at Tk 1,436.24 crores. The total debt increased to Tk 16,865.96 crore. Out of this, about Tk 1,158 crore were paid that financial year. At the end of the financial year, the debt status stands at Tk 15,707.96 crore. Out of this short term loan was Tk 1,323.77 crore and long term loan was Tk 14,384.19 crore.
Meanwhile, at the beginning of the financial year 2022-23, the amount of debt of Payra Power Plant stands at Tk 15,707.96 crore. Due to the devaluation of rupees, the exchange rate loss in that financial year stood at Tk 2,412.24 crores. The total debt increased to Tk 18,120.20 crore. About Tk 1,323.77 crore was paid out of this last financial year. At the end of the financial year, the debt stood at Tk 16,796.43 crore. Out of this short-term loan was Tk 1,623.70 crore and long term loan was Tk 15,172.73 crore.
According to this, at the end of the last financial year, the debt status has increased by Tk 1,088.47 crore or 6.93 percent. Out of this, long-term debt has increased by Tk 788.54 crore or 5.48 percent. And short-term loans increased by Tk 299.93 crore or 22.66 percent.
According to the information, the interest paid on the loan of Payra Power Plant in the financial year 2021-22 was Tk 66.58 million. Out of this, short term loan interest was Tk 36.93 crore and long term loan interest was Tk 29.65 crore. However, the interest payment cost of the power plant increased to Tk 1,261.51 crore last financial year. Out of this, short term loan interest was Tk 101.95 crore and long term loan interest was Tk 1,159.56 crore
According to this, the interest payment cost of Payra power plant increased by Tk 1,194.93 crore or 1,794.73 percent last financial year. Out of this, short-term loan interest payment has increased by Tk 65.02 crore or 176.06 percent. And the interest payment of long-term loans has increased by Tk 1,299.91 crore or 3,810.83 percent.
The power plant’s outstanding or payable interest has increased in the last financial year, even after paying high interest on the loan. The amount for the financial year 2021-22 was Tk 96.35 crore. Last financial year it increased to Tk 216.15 crore. That is, the interest payable has increased by Tk 119.80 crore or 124.34 percent.
When asked, BCPCL Managing Director Engineer AM Khorshedul Alam told that the loan was taken for Payra Power Plant at the rate of Libor + 2.98 percent. However, Liber has departed. Currently SOFAR+2.98 percent interest is payable on the loan. However, at the time of taking the loan, Libor was less than two percent. Currently Sofar stands at around five and a half percent. This has increased the cost of interest payments.
He also said that the power plant loan was taken in dollars. So, payment has to be made in dollars. However, due to the increase in the exchange rate, the principal loan amount has also increased in local currency. However,Payra pays PDB through pass through method of loan and interest payment of power plant. In this, PDB’s capacity charge has increased substantially.
Incidentally, in the financial year 2021-22, the capacity charge of Payra Power Plant was Tk 2,603,280,000. Last financial year it increased to Tk 4,108.38 crore. That is, the cost of paying capacity charges has become one and a half times.