“Bangladesh Poised to Clear 100 of Millions in Power Arrears Ahead of National Elections”

Bangladesh will start paying off its debts

to liquefied natural gas (LNG) suppliers, international oil companies, and power plant owners in July by paying about US$960 million a month. This crucial step was taken at the request of Prime Minister Sheikh Hasina ahead of the country’s upcoming elections next year.


The weekly allocation of $160 million is allocated to the Energy Department, which operates under the auspices of the Department of Energy, Energy and Natural Resources (MPEMR), and whose primary objective is to repay outstanding loans from asset owners.
In addition, $80 million will be transferred to the Department of Energy and Mineral Resources (EMRD) to enable timely payments to LNG suppliers and international oil companies.
To ensure uninterrupted natural gas supplies, Petrobangla Chairman Zanendra Nath Sarkar stressed the need to clear debts to LNG suppliers and the CIO. In addition, MEMR’s power division has requested approximately $5.921 billion in funding for fiscal 2023-24 to ensure uninterrupted power supplies.

bangladesh-to-settle-hundreds-of-millions-in-power-bill

Bangladesh is seeking support from international lenders, motivated by a desire to meet its energy commitments and thus avoid disruption ahead of the upcoming January 2024 general election.
Despite the current financial difficulties, the country remains steadfast in its determination to find energy resource solutions. BIt is backed by the support of global lenders. Petrobangla is currently in talks to obtain a loan of approximately US$500 million from the Islamic Trade Finance Corporation to achieve this goal. In addition, the Bangladesh government is making concerted efforts to attract foreign investors. The Economy Ministers Council recently approved the country’s first Brent-style production-sharing arrangement, which for the first time includes a profit-sharing mechanism that offers investors a larger share of production.

In addition, companies involved in such projects can export natural gas after meeting domestic demand. Hydrocarbon pricing in this innovative contract model is linked to the same benchmark used for LNG purchases. Despite past failures in deep-sea research, Prime Minister Sheikh Hasina’s government remains committed to pursuing unprecedented success in developing the energy sector. Also read: Indian group Amara Raja is building $130 million solar power project in Bangladesh As of June, the government owed nearly US$2.4 billion to independent private power producers, US$475 million in electricity imported from India, US$350 million to gas companies and US$320 million to LNG suppliers. In addition to settling outstanding payments, Bangladesh is actively taking measures to attract foreign investment and boost economic growth.

The Cabinet Economic Council recently approved the country’s first production-sharing agreement for Brent crude, based on a profit-sharing formula that gives investors a larger share of production. Companies will also be able to export natural gas after meeting domestic demand. The price of hydrocarbons in this model contract is linked to the same benchmark used for the purchase of LNG. Despite previous failures in deep-sea research, Prime Minister Sheikh Hasina’s government remains committed to the successful development of the energy sector.

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