The Ministry of Finance released substantial funds in July and August 2023 for the Power Development Board (PDB) to subsidize electricity, specifically for private sector independent power plants (IPPs) and rental and quick rental power plants. The Finance Department issued Tk 1,000 crore on July 18 for dues up to June 2023, with an additional Tk 1,808 crore in cash and Tk 1,000 crore from the 2024-25 budget. The funds are strictly for paying IPP, rental, and quick rental plant dues and must be reconciled through future audits. To manage subsidies fairly, real-time data ERP software implementation in PDB and its units is required. The ministry is also pushing for reduced capacity charges and financial integration. Due to cash payment difficulties, special bonds worth Tk 15,000 crore were issued against bank loans of private power entrepreneurs, and Tk 10,000 crore was deducted from the budget for subsidies. As of June 30, subsidy arrears totaled at least Tk 30,000 crore. The 2024-25 budget allocates Tk 40,000 crore for subsidies, primarily for capacity charges. In 2022-23, capacity payments were Tk 28,000 crore, up from Tk 5,600 crore in 2017-18. This increasing cost burden is ultimately borne by consumers.
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