Power sector sinking into losses

PDB’s outstanding liability soars to Tk 41,000 crore!

Special Correspondent: The Power Development Board (PDB) is grappling with severe financial losses as it continues to purchase electricity at high prices while selling it at lower rates. This unsustainable pricing model is resulting in a monthly deficit exceeding Tk 3,600 crore. To bridge this gap, substantial subsidies are required, but the Ministry of Finance has been inconsistent in releasing these funds. Consequently, PDB is struggling to pay its dues to various government and private power plants.
Adding to the financial strain, PDB has been unable to settle the electricity import bills from India due to the ongoing funding crisis. Furthermore, payments for gas supplied by various Petrobangla companies are also in arrears. As of January, PDB’s total outstanding liabilities have ballooned to over Tk 41,000 crore. The situation worsens each month due to the delay in subsidy disbursements, prompting PDB to urgently request the release of the necessary funds.

This critical information was revealed in a letter from PDB to the power department, detailing the sector-wise breakdown of arrears. According to the letter, outstanding bills for Independent Power Producers (IPPs), Rental Furnace Oil, Gas, and Solar Power Stations amounted to Tk 15,254 crore by January. Additionally, debts to coal-based private plants stand at Tk 6,656 crore, while the bill from India’s Adani is Tk 4,400 crore, and other electricity import bills total Tk 1,943 crore.
Government power plants are not exempt from these financial woes, with unpaid bills reaching Tk 9,648 crore as of January. PDB also owes Tk 3,425 crore for gas purchased from various Petrobangla companies for its own power plants. In total, PDB’s outstanding debts amounted to Tk 41,066 crore by the end of January.
The letter highlights that PDB faces monthly bills ranging from Tk 8,700 crore to Tk 8,800 crore, while its average revenue is only Tk 5,000 crore. This results in a monthly shortfall of Tk 3,600 crore. Despite issuing Tk 10,599 crore in bonds, the Ministry of Finance still owes PDB Tk 35,912 crore in subsidies.
For the last financial year, the Ministry of Finance disbursed Tk 29,510.59 crore in subsidies. However, arrears from February to June of the last fiscal year amount to Tk 14,900 crore, and from July to January of the current fiscal year, an additional Tk 21,903 crore in subsidies is due.
In the current fiscal year, the Ministry of Finance has allocated Tk 35,000 crore for subsidies. Of this, Tk 7,700 crore has been disbursed in cash and Tk 10,599 crore through bonds, totaling Tk 18,299 crore. An additional Tk 5,000 crore may be disbursed in bonds during the second phase. The letter urges the prompt release of the remaining Tk 11,701 crore in subsidies to mitigate the financial crisis PDB is facing.