The devaluation of the taka against the US dollar will increase the Bangladesh Power Development Board’s subsidy burden by over Tk4,404 crore for the fiscal year ending June 30, according to the South Asian Network on Economic Modeling (Sanem). Sanem highlighted concerns over the reduced budget allocations for the power and energy sectors in the proposed 2024-25 budget. Sanem noted that a devaluation of Tk1 against the USD in FY24 could raise subsidy payments by Tk473.6 crore, with the projected devaluation increasing the subsidy burden by Tk4,404.48 crore. Additionally, tax exemptions for the energy sector decreased from Tk11,942.147 crore to Tk7,611 crore. Sanem expressed concern over rising electricity tariffs, insufficient renewable energy funding, and overcapacity in power generation, with 27 new power plants under construction and questions surrounding new LNG infrastructure due to volatile prices. Sanem recommended increasing budget allocation for renewable energy projects, managing currency devaluation impacts, addressing subsidy burdens efficiently, and reassessing the declining budget for the Energy and Mineral Resources Division.
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