Govt decides to renew deals with 4 rental power plants under ‘No Power, No Payment’ policy
BPDB this year sought a subsidy of Tk16,000 crore to offset its loss due to the purchase of electricity at a higher rate from private plants, including rental ones
The Cabinet Committee on Public Purchase (CCPP) has approved the proposal to renew contracts with four rental power plants – by 1-5 years – under the "No Power, No Payment " policy.
The committee also approved the construction of a new 660MW rental power plant at Mirsarai in Chittagong.
Finance Minister AHM Mustafa Kamal made the disclosure while briefing reporters about the outcomes of the two consecutive meetings of CCPP and Cabinet Committee on Economic Affairs (CCEA) on Wednesday.
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He defended CCPA's approval to further extend the power purchase agreement (PPA) with the four gas-based rental power plants – the tariff rates of which are considered by energy experts as to be excessively higher and the main cause of the financial loss in the power sector.
The state-owned Power Development Board (BPDB) this year sought a subsidy of Tk16,000 crore to offset its loss due to the purchase of electricity at a higher rate from private plants, including rental ones.
Under the new extension of the rental power plants' PPA, the finance minister said, there will be a provision of "No Power, No Payment", which means if the government does not purchase, it would not have any obligation to pay.
He said the government would not incur any loss under the new extension of the PPA with the rental power plants.
Kamal said that the country's general people are now financially doing well overcoming the Covid-19 fallouts as the government has taken various effective initiatives.
"My belief is that people are now in a better financial condition, and they can afford to pay," he said disagreeing with the idea that people have lost affordability to pay any increased tariff for electricity.
The finance minister's comments came in response to a question how could the people afford if electricity tariff has further been raised as his ministry has moved a proposal in this regard.
He, however, said there is no issue of raising power tariff at this point of time. "No proposal on raising power tariff has come yet," he added.
