Photo : Messenger
Power, one of the government’s priority sectors, is currently suffering from a funding crisis related to paying outstanding bills and importing primary fuels. Unexpectedly, this crisis is expected to continue into the new fiscal year as well.
The new Finance Minister, Abul Hassan Mahmood Ali, presented his first proposed budget to Parliament on June 6. He proposed an allocation of Tk 30,317 crore for the Power and Energy Sector in FY2024-25, which is Tk 4,502 crore lower than the previous year.
According to the Power Development Board (PDB), as of February, outstanding bills to private power producers stood at Tk 33,108 crore, including Tk 5,297 crore for electricity import bills. The Power Division has requested Tk 34,000 crore in subsidies in the next proposed budget for the power sector. In the current financial year, the subsidy for electricity was Tk 35,000 crore.
However, comparing with the demand and allocation, the fund crisis of the sector will continue during the next fiscal year.
Considering the importance of extracting marine resources and its fair use, FM proposed to allocate Tk. 100 crore for research and development activities in this sector.
Also, considering the importance of renewable energy in building a developed, prosperous, smart and sustainable Bangladesh by 2041, he proposed a special allocation of Tk 100 crore to encourage its development and use.
Experts believe that dependency on the import of fuel oil, LNG, coal, and power has led to the fund crisis in the energy sector. Additionally, the government's random involvement of the private sector in power generation has exacerbated the crisis.
Professor Shamsul Alam, a prominent energy expert in the country, expressed to the Daily Messenger, "The unwise plan, focusing solely on generation at any cost, has created the fund crisis. This crisis will not end in a year but will continue to afflict us for the next 50 years, as the government has outlined the master plan based on imports."
Despite the condition imposed by the International Monetary Fund (IMF) to phase out subsidy support, the government is continually increasing power prices to comply. Experts warn that budgets like this one will further fuel the hike in power prices.
The Energy Division, the primary organisation of the Power, Energy, and Mineral Resources Ministry responsible for overseeing the country's energy arrangements, has requested a significantly lower allocation in the upcoming budget compared to the Power Division. This is despite the fact that the Energy Division is currently unable to arrange primary energy for power plants and industries. Instead, the division is resorting to importing expensive fuels for the power plants, neglecting investments in exploration.
In the next budget (2024-25), Tk 38,799 crore has been requested for the power and energy sector. Out of this, the Power Division has asked for Tk 34,335 crore, while the Energy Division has requested Tk 4,463 crore. In the revised budget for the current financial year, Tk 33,904 crore has been allocated to this sector, with Tk 30,063 crore for the Power Division and Tk 3,841 crore for the Energy Division.
The Power Division plans to spend Tk 34,335 crore in the annual development program (ADP) for 37 projects in the next financial year. Of this amount, Tk 10,509 crore has been requested from the government, Tk 18,667 crore from project aid, and Tk 5,159 crore from its own funds. However, this plan will not be implemented due to the lower allocation in the proposed budget.
Messenger/Fameema
