Bangladesh is set to pay its dues to LNG suppliers, international oil companies (IOCs) and power plant owners by paying about $960 million a month from July. The decision has been taken after Prime Minister Sheikh Hasina’s directive ahead of next year’s elections in the country.
Bangladesh Energy Bill Controversy: How Is Payment Structured?
Every week, $160 million is allocated to the power department under the Ministry of Power, Energy and Mineral Resources (MPEMR), while $80 million is allocated to the Energy and Mineral Resources Department (EMRD) to settle debts with power plant owners. Payments.) will be given to LNG suppliers and IOCs.
To ensure uninterrupted natural gas supply, Petrobangla Chairman Zanendra Nath Sarkar highlighted the need to repay loans to LNG suppliers and IOC. The power division of MPEMR has requested about $5.921 billion to ensure uninterrupted power supply for the financial year 2023-24.
Bangladesh seeks support from international lenders
Despite facing fiscal challenges, Bangladesh aims to settle its energy bills in cooperation with global lenders to avoid disruptions before the next general election in January 2024.
Petrobangla is currently in discussions to borrow about $500 million from Islamic Trade Finance Corporation.
As of June, the government owed about $2.4 billion to private independent power producers, $475 million for electricity imports from India, $350 million to gas companies and $320 million to LNG suppliers.
Bangladesh is taking steps to address the balance of payments as well as attract foreign investors.
The Cabinet Committee on Economic Affairs recently approved the country’s first Brent crude-integrated model production sharing agreement.
This new model, based on a profit-sharing formula, provides investors with enhanced output shares and allows companies to export natural gas after meeting domestic demand. The price of hydrocarbons in the model contract is linked to the same benchmark used to purchase LNG.
Despite past setbacks in deepwater exploration efforts, Prime Minister Sheikh Hasina’s government is focused on achieving success in developing the energy sector.