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The International Monetary Fund does not recommend an increase in electricity prices now, but calls for steps to make the electricity sector sustainable.
The call came during a meeting of the IMF staff mission with the Power Division chaired by Secretary Habibur Rahman yesterday. The 10-member mission is in Dhaka on a 15-day tour to work out the conditions for a prospective loan of $4.5 billion.
“This is the first time that the IMF does not recommend raising the price of electricity. The IMF team informed that this [raising the price] will not be a condition for getting the loan,” a top Power Division official who attended the meeting told The Daily Star.
At the meeting, the Washington-based multilateral lender wanted to know the current situation and plans for the country’s power sector.
In response, Power Division officials said that electricity from three coal-based power plants – Payra and Rampal and Adani Power India – will be added to the national grid by next January. Once added, there will be no crisis in the power generation sector, they said.
The IMF team stressed the need to generate power from renewable energy sources as they wanted to know the government’s plans for renewable energy.
Power division officials presented the progress and plans of this sector.
In another meeting with the Bangladesh Power Development Board (BPDB) in the afternoon, the IMF called to introduce an alternative mechanism to reduce large energy subsidies, according to people familiar with the discussion, who requested anonymity to disclose sensitive deliberations.
The IMF team wanted to know the details of GDP income and expenditure and asked how the country’s organization would function if subsidies were stopped.
In response, BPDB officials said that the organization will work as per the government’s decision on subsidies.
The IMF also discusses power plant capacity payments. It wants to know the financial impact of renting power plants.
In this case, BPDB officials say that the number of PLTUs that rent has decreased.
Out of the total subsidy of Tk 29,000 crore in fiscal 2021-22, only Tk 1,100 crores went to the rental power plant.
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