Bangladesh will pay hundreds of millions of electricity bills ahead of the national elections.
HIGHLIGHTS
According to Sheikh Hasina's administration in Bangladesh,
$160 million will be given to the Ministry of Power, Energy and Mineral
Resources (MPEMR) Power Division to pay off debts owed to owners of power
plants.
Starting in July, Bangladesh plans to pay roughly $960 million each month to settle its financial obligations to LNG suppliers, international oil corporations (IOCs), and owners of power plants. Following a direction from Prime Minister Sheikh Hasina, the choice was made in advance of the nation's scheduled elections the following year.
What is the payment mechanism like in the Bangladesh
electricity bill dispute?
To pay power plant owners, each week the
Ministry of Power, Energy and Mineral Resources (MPEMR) will give $160 million
to the Power Division and $80 million to the Energy and Mineral Resources
Division (EMRD) for payments to LNG suppliers and IOCs.
Petrobangla Chairman Zanendra Nath Sarker stressed the importance of paying off debts to IOCs and LNG suppliers in order to secure ongoing natural gas supplies. In order to guarantee a consistent supply of power, the MPEMR's Power Division has additionally sought around $5.921 billion for the fiscal year 2023–2024.
Bangladesh has requested aid from foreign lenders.
Bangladesh wants to pay off its energy debt with the help
of international lenders despite its financial difficulties to prevent
interruptions before the next general election in January 2024.
The Islamic Trade Finance Corporation is interested in
lending $500 million to Petrobangla.
Also, read: Bangladesh receives $130 million solar power project from India's Amara Raja Group
The government owes private independent power producers almost $2.4 billion as of June, as well as $475 million for energy imported from India, $350 million to gas businesses, and $320 million to LNG suppliers.
Bangladesh is making efforts to entice international
investors in addition to clearing unpaid bills.
The nation's first-ever production-sharing deal tied to Brent crude was recently authorised by the cabinet committee on
economic issues.
This new profit-sharing-based model gives investors more output shares and permits businesses to export natural gas after satisfying domestic demand. The model contract's hydrocarbon pricing is based on the same benchmark used to buy LNG.
The administration of Prime Minister Sheikh Hasina is committed to making strides in the development of the energy sector despite previous failures in deep-sea exploration initiatives.
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