[🇧🇩] Energy Security of Bangladesh

[Saif]

A repeal that retains impunity

Why is the interim government taking this seemingly anti-public stance?

www.thedailystar.net

Quick Enhancement of Electricity and Energy Supply Act
A repeal that retains impunity

FILE VISUAL: ALIZA RAHMAN

During Sheikh Hasina's rule, the power and energy sector enjoyed the ultimate lack of accountability. This is the first sector where the fascist regime established an ideal model for political and economic corruption, and later implemented it in other sectors, including education, health, and transportation.

The basis of this structure was a black law, the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010, which contradicted the constitution's basic principles, undermined public interests, and destroyed the country's economic capacity. After the fascist regime's fall and during the interim government's tenure, the demand to repeal this law quickly took shape. In the meantime, the validity of two of its sections, which were most detrimental to public interests, were challenged in the High Court followed by their annulment. Eventually, the government issued an ordinance to repeal the entire law. But two articles were added in that ordinance that are potentially more dangerous than the repealed law. They not only undermine public interests, but also degrade the spirit and aspirations of the July uprising.

But why is the interim government taking this seemingly anti-public stance? Before we look for the answer, let's see what this law actually contained and what became of it after the repeal.

The black law's history and evolution

Often termed the "Impunity Act," the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act was supposed to be in force for a period of two years from 2010, but was later extended for a total of 16 years in four phases, with the implementation period being till 2026.

Under the sub-heading "Publicity of the plans or proposal," Section 6(2) states, "Notwithstanding anything contained in sub-section (1), the Processing Committee mentioned in section 5 shall consult and bargain with a single or limited number of organizations about any purchase, investment plan or proposal and, with approval of the Minister, Ministry of Power, Energy & Mineral Resources, select an organization for the said work..."

That is, work can be awarded, with the consent of the minister, through communication and negotiation with a single or limited number of organisations, ignoring competitive tenders or bids.

Under the sub-heading "Bar to jurisdiction of Court, etc," Section 9 states, "No question regarding the validity of any act done or purported to be done, any action taken or any order issued or direction given under this Act, shall be raised in any court."

After Hasina's fall, Supreme Court lawyers Dr Shahdeen Malik and Tayeb-Ul-Islam Showrov filed a writ with the High Court, challenging the validity of sections 6(2) and 9. On November 14, 2024, the High Court bench of Justice Farah Mahbub and Justice Debashish Roy Chowdhury declared the provisions illegal. Then on November 28, 2024, the interim government repealed the law by promulgating the Quick Enhancement of Electricity and Energy (Special Provisions) (Repeal) Ordinance, 2024.

New 'impunity' in the ordinance

In the repeal ordinance itself, the government has added new provisions for impunity in sections (2)(a) and (b) under Article 2.

Section (2)(a) states, "Any contract entered into or any action taken under a contract entered into under the said act immediately before such repeal shall be deemed to have been validly entered into or taken."

Section (2)(b) goes on to say, "Any proceeding under a contract entered into or taken under the said act shall continue or be carried out as if the said act had not been repealed."

That is, all projects taken under the law till the repeal have been considered valid, and can continue. That means the government has repealed the law but considers all the previous sins as virtues. This is against the constitution's fundamental rights, the consumer's fair rights, and a violation of energy justice. This ordinance has set a terrible precedent by hindering fair energy transition.

So, is the repeal ordinance an attempt to protect the interests of the corrupt oligarchic class in the power and energy sector? Or is there a subversive attempt to make this government unpopular and lead it astray? Let us explore the possible reasons.

First, the power and energy ministry was known as a hotbed of corruption and misrule during Hasina's rule. An anti-national nexus of dishonest bureaucrats, businesspeople, and politicians was the driving force behind this misrule. They have created an oligarchic class and looted the sector by establishing a legal framework. This class has thrown away the people's rights by making plunderous expenses, and in turn, profits.

Because of them, the cost of generating electricity per unit grew from around Tk 2 in 2009-2010 to above Tk 11 in 2023-2024. Because of them, Bangladesh's power and energy sector has lost its domestic capacity and has become an import market.

This oligarchic class has gradually weakened the sector's public branch and enriched privatisation in the name of reform. They have created opportunities to loot thousands of crores in the name of capacity charges by keeping private power plants idle for years. To continue this looting and shield criminals of the fascist era, they have imposed these provisions.

Second, the current energy adviser, who is the former energy secretary, is not keen on breaking the cycle of privatisation. That is why, although the new government formed reform commissions on 11 issues, none has been formed for the power and energy sector as yet. Such anti-people decisions indicate towards his new position not being free from conflict of interest.

Third, the main spirit of the student-mass uprising was to eliminate discrimination. But discriminatory provisions have been left in place to stop all competition in the energy sector.

Fourth, the nexus of corrupt bureaucrats, businesspeople, and politicians—who are allies of autocracy and are trying to prevent progress—has re-emerged. These looters of public wealth are determined to protect laundered money and have facilitated these new provisions.

By providing new legal protection for these crimes, the government has shown that the ghost of tyranny is still present, and instead of chasing it away, it may very well be protecting it.

Shuvo Kibria is a senior journalist and engineer.​

 

[Saif]

LNG deal with US co raises energy security risk

The deal that Bangladesh has recently signed with the Louisiana-based Argent LNG to import liquefied natural gas is set to increase energy risks and unreliability, energy experts have warned.

www.newagebd.net

LNG deal with US co raises energy security risk
Emran Hossain 04 February, 2025, 23:28

The deal that Bangladesh has recently signed with the Louisiana-based Argent LNG to import liquefied natural gas is set to increase energy risks and unreliability, energy experts have warned.

They believe that the American company will emerge as the main beneficiary of the non-binding deal, using Bangladesh’s reputation as a potential buyer to secure finance needed to launch its business.

On January 24, the Bangladesh Investment Development Authority signed a non-binding deal with the Argent LNG to purchase five million tonnes of LNG annually.

Identifying the Argent LNG project highly uncertain as it, with a deadline of becoming operational by 2030, could not yet start constructing necessary infrastructure, the US-based Institute for Energy Economics and Financial Analysis warned that buying LNG from the USA market would expose Bangladesh to even more external shocks.

‘Argent LNG still has a long way to go in securing binding deals with customers before it can secure financing and proceed to construction,’ said Sam Reynolds, LNG and gas research lead for Asia at the Institute for Energy Economics and Financial Analysis, wrote in an email communication with New Age over the LNG deal.

Argent LNG is facing serious challenges in securing finance and binding contracts from creditworthy buyers amidst a rush of such projects being implemented worldwide, including in Qatar and the USA, according to the institute.

On its website, the Argent LNG speaks about its ambitious plans to supply fuel to power generation assets across Japan, Southeast Asia, Europe, South America, the Caribbean, the Middle East and North Africa.

The amount of LNG that Bangladesh agreed to import will represent half the capacity that the Argent LNG plans to have at its initial stage. Eventually, the company plans to increase its capacity to 25 Million Tonnes Per Annum (mtpa).

‘The deal is unacceptable, replete with irregularities and flaws,’ said prominent economist Anu Muhammad, also a former member secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports.

Bangladesh’s national fuel, gas and minerals company Petrobangla, which signs such power and energy deal, expressed its ignorance after the deal with the American company was signed in Washington by the BIDA.

The interim government had promised that the days of having power and energy deals without tender were over with the ouster of the Sheikh Hasina-led regime amid a student-mass uprising in last July-August. As part of its pledge, the interim government even scrapped the indemnity law allowing deals sans tender.

Energy division secretary and Petrobangla chairman did not answer New Age calls made for comments.

BIDA executive chairman Chowdhury Ashik Mahmud Bin Harun on January 26 defended the signing of the deal as the opening step in a process that would complete after many negotiations.

He said that any future binding agreement would adhere to Bangladesh’s legal framework.

‘The deal signifies the incumbent government’s lack of respect for what people need,’ said Anu Muhammad.

LNG as a source of energy proved unreliable during the past Awami League regime, which introduced it in 2018, leading to serious economic consequences.

Bangladesh descended into its worst energy crisis, accompanied by a prolonged spell of unprecedented inflation, within years of the start of LNG import that was done through long-term contracts and spot market purchases.

The dollar crisis that hit in 2022 was largely due to import of energy, mainly LNG.

Bangladesh spent Tk 1.73 lakh crore on LNG import until September last year since 2018. The outstanding LNG bill stood at Tk 1,787 crore in September.

Consumers experienced frequent price hikes since the LNG import started with household consumers seeing their energy bill inflate by as high as 35 per cent, hotels and restaurants by 79 per cent and industries by about 200 per cent so far.

Still, Bangladesh was far from witnessing an end to its energy crisis, supplying about 2,700mmcfd in best case scenario against the demand of 4,000mmcfd, about a fourth of which was LNG.

‘Bangladesh actually needed to move away from LNG,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development, a platform of green activists.

Money was not the only problem, Hasan Mehedi said, infrastructure challenges emerged as important as financial factor in disaster-prone Bangladesh.

Last year, one of the two floating storage and regasification units remained out of operation for six months between January and September after the cyclonic storm Remal hit, said a report of the Institute for Energy Economics and Financial Analysis.

Such incidents recurred since 2018, showed the report, affecting both the regasification units, prompting authorities to cancel LNG cargoes one after another.

Equipment issues also prompted suspension of operations at the units.

‘What is frightening is the government trying to pass the deal as a big one as well as a big strategic move,’ said Hasan Mehedi.

The non-binding deal has no indication of the potential LNG price. The IEEFA, however, predicted that the product would be expensive, given that the cheapest LNG supplier in the world is Qatar.

The US gas market has been rather stable lately but is likely to hike prices in future due to increase in demands, the IEEFA observed.

Bangladesh would also need to spend more on transporting LNG from the Gulf of Mexico, about 15,000km away, double the distance current LNG supplies arrive from.

‘The price that Bangladesh pays for LNG would depend on gas market fundamentals in the United States, leaving the country highly exposed to factors beyond its control,’ said Sam Reynolds.

More viable options could have been signing long-term deals with nearby LNG suppliers given many new LNG projects are under construction, energy experts further observe.

‘Bangladesh stepped into a trap by signing the LNG deal,’ said Hasan Mehedi.

Energy expert Badrul Imam described the deal as a frustrating development.

‘More LNG expense means fewer resources for exploration,’ he said.

‘It does not end the energy crisis, rather threatens to increase it,’ said Badrul.

Having admitted that he was informed before signing of the deal, Energy adviser Muhammad Fouzul Kabir Khan, however, told New Age that the deal carried very little significance.

Asked about the potential benefits and risks of the deal, he asked the reporter to get the answers from the BIDA, while adding that they found some of the questions too hypothetical to be answered.

‘Can energy prices be predicted five years in advance? The cost of transportation might not always depend on the distance,’ he said.

‘Above all, the company (Argent) does not have any gas in its reserve. There is no question of buying at the moment,’ he added.

From the adviser’s explanation it is apparent that the energy ministry within its legal framework has no option to go ahead with the non-binding agreement as deals can be achieved by three means—open tender, government-to-government and public-private partnerships. While public-private partnership often faces question over the selection of private partner, competition remains the most transparent way of buying the products.​

 

[Saif]

No load shedding expected in Ramadan: Adviser

Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan on Wednesday hoped that there would be a power outage during the month of Ramadan. “A plan was taken to keep the country free from load shedding during the Ramadan. But some areas of the country might experience load shed

thefinancialexpress.com.bd

No load shedding expected in Ramadan: Adviser
BSS
Published :
Feb 05, 2025 19:28
Updated :
Feb 05, 2025 19:28

Advisor Muhammad Fouzul Kabir Khan addressed an inter-ministerial meeting at Bidyut Bhawan on Wednesday. Photo : BSS

Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan on Wednesday hoped that there would be a power outage during the month of Ramadan.

“A plan was taken to keep the country free from load shedding during the Ramadan. But some areas of the country might experience load shedding during the summer,” he said.

Addressing an inter-ministerial meeting on power and energy supply during the upcoming Ramadan and irrigation season at Bidyut Bhaban, he said load shedding occurs due to various reasons.

“We have given instructions to avoid load shedding except for technical reasons,” the adviser said.

He said that the electricity demand during the summer and irrigation season has been estimated at 18,000 MW, out of which 6,000 MW is required for the cooling (AC) system.

“Around 900 million cubic feet per day (mmcfd) gas is now being supplied for electricity generation, which will be 1200 mmcfd during Ramadan to produce additional electricity, Fouzul Kabir said.

The adviser said that the gas supply will be 1100 mmcfd from April to September (Summer Season). During the Ramadan, the electricity demand will be 15000 MW. But we have made preparations for an uninterrupted power supply.

If we can keep the AC temperature up to 25 or 26 degrees Celsius level, the demand will be reduced by 2000 to 3000 MW. And then there will be no need for load shedding, he said.

Fouzul Kabir said that load shedding happens due to a shortage of primary energy supply and technical reasons.

Meetings with concerned departments were held to ensure sure availability of funds and got assurance to procure necessary fuels for power generation during Ramadan.​

 

[Saif]

Industries reeling from persistent gas crisis

Industry insiders have said that due to years of interruption in gas supply, export-oriented industries and other manufacturing units were facing an acute crisis...

www.newagebd.net

Industries reeling from persistent gas crisis
Saddam Hossain 06 February, 2025, 22:47

A file photo shows a man working in a cotton textile mill. Industry insiders have said that due to years of interruption in gas supply, export-oriented industries and other manufacturing units were facing an acute crisis. | New Age photo

Industry insiders have said that due to years of interruption in gas supply, export-oriented industries and other manufacturing units were facing an acute crisis.

They also said that the country’s major industries, such as textiles, ceramics and the captive power plants of the readymade garment industry, require a gas pressure of 15 per square inch, but they usually get 2 or 3 PSI, even sometimes zero.

Factory units located at industrial hubs like Dhaka, Narayanganj, Gazipur, Narsingdi, Manikganj and Mymensingh are facing acute interruptions in the gas supply.

Moreover, the country cannot import sufficient LNG due to a reserve crunch, said the industry people.

The country requires around 4,000 million cubic feet per day (MMcfd) of gas, including imported energy. The current supply is under 3,000 MMcfd, leaving a supply deficit exceeding 1,000 MMcfd.

Talking to New Age, Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, said that 50 per cent of the textile mills had been closed due to a gas shortage.

‘Our loan is becoming classified as overdue in the bank is increasing. We yet to receive any instructions from Petrobangla or any other government authority,’ he added.

The government did not import fertiliser on time, and now it diverts gas to fertiliser factories, further worsening the situation.

The BTMA president urged the government to review contract signed under the previous regime according to the price index.

He also said that if the government does not take immediate action, the workers of the closed factories might take to the streets.

The ceramic industry is a fully gas-dependent process industry. Gas is considered a raw material and there is no alternative fuel to gas in this sector.

According to industry insiders, ceramic factories need a pressure of 15 PSI, but they experienced drops to as low as 2 or 3 PSI or even zero.

Talking to New Age, Moynul Islam, acting president of the Bangladesh Ceramic Manufacturers and Exporters Association, said that most of their factories run at 50 per cent of their total capacity.

‘Due to acute gas crisis, our sector is incurring loss of nearly Tk 300 crore per month. Even Petrobangla couldn’t share any measures or future prospects about the improvement of the situation,’ he added.

Petrobangla told them that the situation may improve soon only if adequate LNG was imported or if they can explore new gas fields.

‘In the last 9 years from 2015 to 2023, the authority hiked the gas price by about 345 per cent and in 2023, they increased the price by about 150 per cent and promised us to supply uninterrupted gas, but they can’t,’ Moynul said.

He also said that more than 50 registered ceramic companies had suspended their reinvestments due to the gas crisis alone, including five newly established factories that could not start production.

The readymade garment sector uses gas mainly to generate captive power. Due to the interruption in the gas supply, the industry is also facing multifaceted challenges.

Md Abul Kalam, managing director of Chaity Group and panel leader of Shammilita Parishad of the Bangladesh Garment Manufacturers and Exporters Association, told New Age that due to the gas crisis, the sector’s production had decreased by about 25 per cent.

Moreover, as the textile sector has been affected, the RMG sector is also facing problems getting raw materials.

‘Since we generate power through gas in our sector, disruption in gas supply is also damaging our machinery, reducing its lifespan, increasing maintenance costs and damaging sensitive components,’ he added.

He also said that despite increasing the price of gas by almost twofold in 2023, the authorities were not able to supply gas uninterruptedly, as they promised.

In the last week of January, the apex trade bodies of the country’s major four industrial sectors, BGMEA, BKMEA, BTMA and BTTLMEA, sent a joint letter to Muhammad Fouzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources.

In the letter, the manufacturers said that the factories were operating on insufficient gas pressure and uncertainty and were suffering substantial financial losses.

The letter also stated that production in the industry-dense area had decreased by 50-60 per cent due to gas shortage, which has disrupted the supply chain and factories’ production.

Moreover, the timely supply of raw materials to the RMG sector cannot be ensured, which disrupts timely shipments.

Recently at an event at the ERF, the energy adviser Muhammad Fouzul Kabir Khan said that the situation was unlikely to improve until new gas fields were developed in the country.

Despite repeated attempts, Petrobangla chairman Md Rezanur Rahman could not be reached for a comment regarding the situation.​

 

[Saif]

Interim govt’s energy policy echoes AL-era essence

THE interim government appears to be missing out on the chance to walk away from the power and energy policy that the previous Awami League government had continued since 2009 to offer predatory profits to independent and rental power producers. An absence of effective initiatives on part of the...

www.newagebd.net

Interim govt’s energy policy echoes AL-era essence
07 February, 2025, 00:00

THE interim government appears to be missing out on the chance to walk away from the power and energy policy that the previous Awami League government had continued since 2009 to offer predatory profits to independent and rental power producers. An absence of effective initiatives on part of the interim government, which has been in office for about six months, to rein in profiteers that the Awami League government had placed in the power and energy sector has already come to be criticised. Whilst the power plants set up then by profiteers continue to bleed the economy, at a time when the government is trying to bring about economic and other reforms, experts say that there are laws and ways to stop the profiteers from being unjustly benefited. But the interim government has maintained that the cancellation of the agreements is difficult. The signing of a non-binding agreement by the Investment Development Authority on January 24 with the Louisiana-based Argent LNG on the import of five million tonnes of liquefied natural gas a year only comes as the expression of the interim government’s continuing with the Awami League-like power and energy policy.

Whilst experts say that the Argent agreement, replete with irregularities and flaws, could very well increase energy risks and unreliability, speakers at a seminar in Dhaka on February 5 said that the deal on liquefied natural gas import is nothing short of a reflection of how the Awami League government managed the sector that could perpetuate the reign of the syndicate of looters and the corrupt. The speakers have said that in the changed political context, the Argent agreement is a precursor to the continuation of what the Awami League did by allowing more than a hundred power projects under an energy indemnity law, sidestepping competitive processes. No tangible legal action against the Awami League-era power projects has so far been taken after the energy indemnity law was repealed in November 2024. The interim government could have had an exit from the flawed energy policy, but it took up a gas import project the way the Awami League did, which experts say is a surprise. The economic, environmental and public health consequences of the Awami League’s harmful power and energy projects appear to be getting a lease of life during the interim government.

The interim government should, therefore, review the agreement already signed and stop making such agreements in future.​

 

[Saif]

Govt must fish renewable energy sector out of ills

PROGRESS in the renewable energy sector, which has even failed to take off in 16 years since the adoption of the renewable energy policy in 2008, has been mired...

www.newagebd.net

Govt must fish renewable energy sector out of ills
03 April, 2024, 00:00

PROGRESS in the renewable energy sector, which has even failed to take off in 16 years since the adoption of the renewable energy policy in 2008, has been mired in inexperience and mismanagement, which has over the years let in a group of entities largely composed of owners of poultry business, feed mill, real estate trade, infrastructure development and construction, apparel factories, a medical college hospital and a human resources export agency. Experts, who blame the situation for a slow expansion of the renewable energy market and costs far higher than the global average, say that this has happened because of lucrative tariffs that promise high profits, mostly effected in an intransparent manner, holding off well-meaning companies that could meaningfully take the sector forward. Experts say that a solar power project should ideally take 13 months for completion, but because of what the sector is mired in, it takes years to begin the construction after the signing of the power purchase agreement with the Power Development Board. The whole process, as experts say, often involve hidden costs and much of lobbying which stops reputed entities from investing in renewable energy. There are only 10 solar power plants with a combined capacity of 459.3MW in operation while the government had plans for a 10 per cent of its power from renewable sources by 2020.

The renewable energy sector in Bangladesh, as experts say, is too lucrative and it could attract investors of all kinds. This is why some investors in renewable energy are local giants that are also involved in the business of fossil fuel, which accounts for about 97 per cent of the installed power generation capacity of about 26.85GW. They are said to have earned millions of dollars in capacity payment, for the power not produced, and in other costs since 2008, as fossil fuel-based generation capacity has jumped more than five times since then. In such a situation, energy experts fear that the inordinate delay in the implementation of renewable energy projects, which spans up to eight years as is observed in Bangladesh projects, is deliberate as delayed renewable projects mean more use of fossil fuel and more profits. Renewable power tariff is also high keeping to global standards. The International Renewable Energy Agency in 2022 estimated the global average cost of solar power at Tk 5.42 a unit while tariff in Bangladesh ranges from Tk 7.68 to Tk 20.87, averaging more than Tk 10 a unit. An Institute for Energy Economics and Financial Analysis expert says that reasonable solar power tariff in Bangladesh should be Tk 8.5 a unit, which can be reduced to Tk 6.5 with some government initiatives. Because of all such problems, not a single quality renewable power project has been implemented in more than a decade and a half.

The renewable energy sector, thus, appears to be another handle of the government to transfer public money to private pockets riding on ill designs and mismanagement. The government must, therefore, purge the energy sector of all ills without delay.​

 

[Saif]

Problem of gas shortage that govt should look into

INDUSTRIES, mainly export-oriented textile, ceramic, knitting and apparel, are reported to be in a difficult situation so much so that insiders say that production in most of the factories has almost...

www.newagebd.net

Problem of gas shortage that govt should look into
08 February, 2025, 00:18

INDUSTRIES, mainly export-oriented textile, ceramic, knitting and apparel, are reported to be in a difficult situation so much so that insiders say that production in most of the factories has almost halved because of continued gas shortage. About 4,000mmcfd of gas is required, but the current supply remains below 3,000mmcfd, leaving both government and industry authorities struggling. Factories located in industrial hubs of Dhaka, Narayanganj, Gazipur, Narsingdi, Manikganj and Mymensingh do not receive uninterrupted gas supply. Many of the industries, especially ceramic industries, which require a supply with the pressure of 15 pounds per square inch, usually receive supply with the pressure of two to three pounds per square inch. Industry owners allege that the pressure sometimes declines to zero. The Textile Mills’ Association says that persistent gas shortage has already forced the closure of a half of the textile mills, noting that with no early action on part of the government, the situation would worsen in no time that could prompt the workers to take to the streets. Most of the industries say that they have been forced to run to half their capacity because of the gas shortage.

Owners further say that gas prices increased by about 345 per cent in nine years since 2015, with promises for an adequate supply, but it has not happened. Apparel factories which run on captive power plants say that the gas shortage has caused a 25 per cent decline in the sectoral production. Ceramic product manufacturers and exporters say that they count Tk 3 billion in losses every month because of the problem. The situation does not only affect production, harming product export, but also puts owners in distress in repaying bank loans, running the risk of becoming non-performing, damages machines and reduces their useful economic life, and increases maintenance costs. Four industry associations in January wrote to the government, seeking a resolution of the problem and describing the uncertainty and problems that the gas shortage has caused to the industries. Industry owners say that the government is diverting gas to fertiliser factories as it did not import fertiliser on time. This remains an issue for the government to look into. Petrobangla is reported to have envisaged no early improvement without adequate import of liquefied natural gas or gas extraction from new fields. The energy adviser has recently said that the situation at hand is unlikely to improve until new gas fields are developed.

A reserve crunch is holding back an adequate import of gas and no hydrocarbon exploration for long has only compounded the matter. The government should, therefore, tie loose ends here and there to improve the supply situation in the short run and earnestly get down to hydrocarbon exploration in the long run.​

 

[Saif]

India’s adani plant: Bangladesh asks for full power supply

Bangladesh has asked Adani Power to fully resume supplies from its 1,600-megawatt plant in India, a Bangladesh official said, after more than three months of reduced sales with supplies halved due to low winter demand and payment disputes.

www.thedailystar.net

India’s adani plant: Bangladesh asks for full power supply

The logo of the Adani group is seen on the facade of one of its buildings on the outskirts of Ahmedabad, India, April 13, 2021. File photo: Reuters

Bangladesh has asked Adani Power to fully resume supplies from its 1,600-megawatt plant in India, a Bangladesh official said, after more than three months of reduced sales with supplies halved due to low winter demand and payment disputes.

Adani, which signed a 25-year contract under former prime minister Sheikh Hasina in 2017, has been supplying power from its $2 billion plant in India's Jharkhand state. The plant, with two units each of 800 megawatts capacity, sells exclusively to Bangladesh.

The Indian company halved supply to Bangladesh on October 31 due to payment delays as the country battled a foreign exchange shortage. This led to the shutdown of one unit on November 1, resulting in the plant operating at about 42 percent capacity.

Subsequently, Bangladesh told Adani to keep supplying only half the power.

The state-run Bangladesh Power Development Board (BPDB) said it had been paying $85 million a month to Adani to clear outstanding dues and has now told the company to resume supply from the second unit.

"As per our requirement today, they have planned to synchronise the second unit, but due to the high vibration, it didn't happen," BPDB Chairperson Md Rezaul Karim told Reuters, referring to some technical problems that stopped the unit from restarting on Monday.

"Right now, we are making a payment of $85 million per month. We are trying to pay more, and our intention is to reduce the overdue. Now there is no big issue with Adani."

BPDB and Adani officials were due to meet virtually yesterday following another meeting recently to work out various issues between them, said a source with direct knowledge of the matter who did not want to be named as he was not authorised to talk to the media.

An Adani Power spokesperson did not immediately respond to a request for comment. In December, an Adani source said BPDB owed the company about $900 million, while Karim said at the time the amount was only about $650 million.

The pricing dispute revolves around how power tariffs are calculated, with the 2017 agreement pricing off an average of two indexes. Adani's power costs Bangladesh about 55 percent more than the average of all Indian power sold to Dhaka, Reuters has reported.

A Bangladesh court has ordered an examination of the contract with Adani by a committee of experts, with results expected this month. This could potentially lead to contract renegotiations.

Last year, Bangladesh's interim government accused Adani of breaching the power-purchase agreement by withholding tax benefits that the Jharkhand plant received from New Delhi, Reuters reported in December citing documents. Bangladesh officials also said they were reviewing the contract.

A spokesperson for Adani told Reuters at the time that it had upheld all contractual obligations with Bangladesh and had no indication Dhaka was reviewing the contract.

Karim has not replied to Reuters' questions on whether the two sides have resolved their differences.

In November, US prosecutors indicted Adani Group founder Gautam Adani and seven other executives for their alleged role in a $265 million bribery scheme in India. Adani Group has called the US allegations "baseless".

In September, the Bangladesh government appointed a panel of experts to examine major energy deals signed by Hasina, who fled to New Delhi in August after deadly student-led protests.​

 

[Saif]

SPECIAL ENERGY FUNDS: Most of Tk 53,000cr misused by AL govt

Most of the special energy funds worth Tk 53,000 crore was misused by the Sheikh Hasina government, ousted in August past year amid a mass uprising, through breaching policies and guidelines during its 15 years of authoritarian regime.

www.newagebd.net

SPECIAL ENERGY FUNDS: Most of Tk 53,000cr misused by AL govt
Emran Hossain 11 February, 2025, 23:31

Most of the special energy funds worth Tk 53,000 crore was misused by the Sheikh Hasina government, ousted in August past year amid a mass uprising, through breaching policies and guidelines during its 15 years of authoritarian regime.

The funds — power sector development fund, gas development fund and energy security fund — were created with money kept aside from gas and electricity sales every month.

Reducing power and energy sector expenses by investing in least-cost power production, natural gas exploration and production and energy efficiency was the main target of creating the funds.

Until June past year, except for the amounts stuck in different stages of transaction and money deducted as tax, the aggregate size of the three funds was Tk 47,700 crore.

Of the amount, 97 per cent was used by the ousted AL government, showed Bangladesh Energy Regulatory Commission data, and about three-fourths of it was spent breaking the policies and guidelines stipulating the use of the funds.

Only Tk 1,500 crore was found with the funds operated by the Bangladesh Power Development Board, Petrobangla and BERC at the end of past financial year.

The use of the funds featured huge imports of liquefied natural gas with 44 per cent of the money or Tk 21,000 crore spent for the purpose. LNG import is blamed for plunging Bangladesh, to a great extent, into the dollar crisis and unprecedented inflation that have been around for over two years.

‘The past government did not care for any rules or laws in conducting its affairs. People never enjoyed the benefits of creating the funds,’ said M Shamasul Alam, energy adviser at the Consumers Association of Bangladesh.

The oldest of the funds, Gas Development Fund, was created on August 1, 2009, immediately after the past government had assumed power and increased the gas price by 11.22 per cent. The fund was created by keeping aside Tk 0.42 from the proceeds of selling a cubic metre of gas.

A good portion of the GDF, which was Tk 20,000 crore, was used for paying tax, though the fund was originally created under the condition of not being taxable.

Highlighting the trend of a rapid depletion in the reserve of gas, accounting for 73 per cent of commercial energy consumption, the GDF policy primarily focused on enhancing natural gas exploration and production.

Exploration projects used Tk 6,800 crore from the fund managed by the Petrobgangla.

In complete violation of the GDF policy, Tk 6,000 crore was taken as loan by the government from the fund for importing LNG.

Petrobangla data showed that past year the import of LNG to meet about a third of the gas demand raised the overall cost of gas by five folds.

Past year Petrobangla bought a unit of gas from state-owned oil companies at Tk 1.5 while the cost of buying the same amount of gas from international oil companies lifting gas from local fields stood at Tk 4.5. The import cost of a unit of LNG, on the other hand, was Tk 62. Imported LNG is blended with local natural gas for supply through the national grid.

‘Spending the GDF for LNG import despite frequent gas price increases was against all logic,’ said Shafiqul Alam, lead energy analyst, Bangladesh at the Institute for Energy Economics and Financial Analysis.

Since the beginning of LNG import in 2018, household consumers have seen their gas bills rise up to 35 per cent while hotels and restaurants have observed a 79 per cent rise in their prices. Industries, however, saw a 179 per cent increase in the gas prices in one go past year. The price hikes were always justified with increased expenses for LNG import.

‘A careful assessment is needed to find out what necessitated the use of the GDF for LNG import,’ said Shafiqul.

Energy experts have long expressed their frustration over the government’s reluctance to explore its own resources, particularly gas reserve, which is believed to be in abundance in the offshore. The reluctance is often linked to strong influence by global fossil fuel lobby, dictating Bangladesh’s power and energy policy over the past two decades.

Petrobangla even transferred Tk 3,000 crore from the GDF to the national exchequer under the controversial special law allowing the government to take away fund sitting idle with state-owned entities. The law, surplus fund act, came into force in 2022 when the past government was battling with a severe economic crisis.

The requirement of taking BERC permission to invest the GDF fund was never fulfilled.

The power sector development fund was created on February 1, 2011 by channelling Tk 0.15 on each unit of bulk electricity sales. The amount that the fund had available for use was Tk 15,700 crore until June past year.

Created with the objective to be invested in low-cost power generation projects, Tk 5,060 crore from the fund was used in five power generation projects, including Tk 1,184 crore going to the project of the coal-based 1,320MW Payra power plant.

A key condition of using the PSDF was that it ensures low-cost power generation. But projects taken under the fund added to the BPDB’s financial burden, particularly due to capacity charge entitlement of the power plants that were not needed in the first place. The past government even could not match the construction of the Payra power plant with required transmission network, keeping it idle for over one year.

The BPDB also took Tk 10,257 crore as loan from the PSDF.

‘Taking loan from the PSDF was the most outrageous move,’ said Shamasul Alam.

‘First, state-owned BPDB took a loan illegally from a fund created with money taken directly from the people’s pocket, and then it passed the responsibility of paying back the loan onto the shoulder of people,’ he observed.

He said that the use of the fund in coal-based power plants went against the spirit that led to the formation of the fund. The fund was primarily meant to be used for gas-based and renewable power generation.

No significant renewable energy investment was made under the PSDF.

Created on September 1, 2015, Tk 15,200 crore was deposited with the energy security fund until June past year. The fund received Tk 0.40 from per cubic metre of gas sales. Almost the entire fund — Tk 15,000 crore — was used for importing LNG on loans.

Established on April 10, 2018, the ESF guidelines said that its main goal was to protect future generation from potential energy crisis arising from using up natural gas reserve. The fund permitted LNG import, but said that it could also be used for the purpose of exploration, extraction, purification, transmission and distribution of natural gas.

The fund, also operated by the Petrobangla, could be used for achieving energy efficiency.

BERC officials said that interests on loans taken from the funds remained largely unpaid, without the authorities even caring to explain their decision of not paying back loans.

‘Energy funds’ administration is a microcosm of how things were done in the power and energy sector during AL’s regime,’ said Hasan Mehedi, member secretary of the Bangladesh Working Group on Ecology and Development, a platform of green activists.​

 

[Saif]

Adani reports machine trouble after Dhaka seeks full supply

The 1,346MW coal-based Adani power plant reported encountering technical trouble in starting its second unit following Bangladesh’s request to run the power plant in India’s Jharkhand at its full capacity.

www.newagebd.net

Adani reports machine trouble after Dhaka seeks full supply
Staff Correspondent 11 February, 2025, 23:34

The 1,346MW coal-based Adani power plant reported encountering technical trouble in starting its second unit following Bangladesh’s request to run the power plant in India’s Jharkhand at its full capacity.

The Adani power plant shut down one of its two units in early November after Bangladesh failed to clear its dues, the amount of which is debated by the two parties.

Bangladesh is expecting a surge in its power demand soon with the last month of the winter season passing amid forecast of the temperature soon going up.

‘There was a technical problem after Adani had started full operation on February 10, a day after we made the request to increase their supply,’ Bangladesh Power Development Board’s chairman Rezaul Karim told New Age.

A special team of engineers is expected to examine the problem today, he said, adding that the starting of full operation depended on fixing the technical glitch.

Bangladesh owes $550 million to Adani, the boss of the state-owned BPDB said.

A request sent to the company responsible for Adani’s public relations for a comment over the matter was not answered.

Earlier in September, last year the group’s chairman Gautam Adani wrote to interim government chief adviser Muhammad Yunus to clear his $800 million outstanding bills.

On Tuesday, Adani supplied about 740MW of electricity, maintaining the level of supply since it reduced its supply citing non-payment of dues in early November last year.

The BPDB officials said that they were making regular payments but there were some controversies that they expected to resolve through negotiations.

Bangladesh expressed its surprise and shock after Adani gave a fresh deadline to get a road map on the payment of its dues by November 7 or face complete suspension in power supply.

This was the second deadline given by the company. The earlier deadline expired on October 31, leading to the suspension of one of the two units.

Experts said that Bangladesh could have managed its power demand without receiving any supply from the Adani power plant had it provided enough supply of fuel for other plants.

The dollar crisis is standing in the way of providing uninterrupted energy supply to power plants.

While issuing the second deadline, Adani claimed that its outstanding bill amounted to $850million, Indian media reported.

Bangladesh at the time said that the actual amount was over $600 million.

Power deal signed with Adani has been described as hugely discriminatory by energy experts.

Bangladesh would have to buy 34 per cent of electricity of the plant’s capacity or would have to face fines under the deal with Adani.

Even if Bangladesh had bought the required amount, the country would have to pay capacity charge.

The agreement has also deprived Bangladesh of taking any action if Adani abruptly suspends its operation.

The power development board has already accused Adani of inflating its bill by about a third taking advantage of the power purchase agreement signed under the direct supervision of then prime minister Sheikh Hasina, ousted on August 5 amid a student-led mass uprising, and her Indian counterpart Narendra Modi.

The agreement, which allowed Adani to greatly manipulate coal prices also made headlines in the national and international media for clauses highly discriminatory to Bangladesh. Under the PPA, the plant was established with a $2 billion investment to earn Adani $12 billion in its lifetime of 25 years.

Bangladesh’s current installed capacity is 27,884MW.

The current maximum demand is around 11,500MW. The demand is set to rapidly rise by March, when the Muslim fasting month of Ramadan is set to begin.

Even with the demand remaining so low, nearly 100MW of load shedding was recorded on Tuesday.

Immediately after Hasina fled to India after the overthrow of her government, India changed its power export rules allowing Adani, which set up the power plant exclusively for producing power for Bangladesh, to sell electricity domestically.​