PTC India and SEIL Energy India have approached the Bangladesh Power Development Board to invoke bank guarantees due to unpaid dues for power supplied. While BPDB has started making payments to Adani Power, SEIL Energy India and PTC India are still awaiting payment for their dues, critical for continued power supply. The Economic Times published this report on September 19, 2024. Full report as follows:
PTC India and SEIL Energy India have written to the Bangladesh Power Development Board (BPDB) seeking to invoke their respective bank guarantees in view of non-payment of dues for the power supplied, according to two industry sources aware of the development. This is even as BPDB has started making payments to Adani Power, which has outstanding dues of over $850 million, sources added.
SEIL Energy India is owed over $150 million as of June 30, 2024. Its bank guarantee amounts to $341 million. The company has a power purchase agreement for 250MW with Bangladesh.
PTC India is owed over $79 million. Its bank guarantee amounts to $307 million. PTC India since 2013 has been supplying 250MW of power to the Bangladesh Power Development Board (BPDB) from West Bengal State Electricity Distribution Co.
"Indian power generators and suppliers, including SEIL Energy and PTC India, have issued a demand notice following the non-receipt of payments through the placement of Letters of Credit," said a source aware of the development, adding that the dues are pending for over eight months and the payment is critical to ensure viability and continuity of power supply to Bangladesh.
In an emailed response, SEIL Energy India spokesperson said, "SEIL is in dialogue with the relevant authorities in Bangladesh. We have adequately apprised the authorities of this unsustainable situation."
He added that while SEIL Energy India continues to supply power to Bangladesh, it remains hopeful the concerned authorities will uphold the contractual terms and expedite the clearing of the dues so that the power supply can be sustained.
PTC India spokesperson said the company has a long-term business relation of supplying power to BPDB since 2013 and the power supply under the current contract is from 2022. "While power supply under the current contract is maintained, the delayed payment from BPDB is being discussed for resolution within the contractual framework of an agreement," PTC India spokesperson added.
In the last few days, however, Bangladesh has started making payments to Adani Power of $4 million to $ 5 million per day. The company had a few days ago written to BPDB for payment of dues. Unlike other Indian companies, Adani Power has a 25-year power purchase agreement.
WB VP assures of Bangladesh’s Energy Sector Budgetary Support
DHAKA, Sep 19, 2024 (BSS) - The visiting World Bank (WB) Vice President (VP) for South Asia, Martin Raiser, today assured of power and energy sector's budgetary support of Bangladesh.
The made the assurance at a meeting with Adviser to Power, Energy and Mineral Resources Muhammad Fouzul Kabir Khan at his ministry conference room at Bangladesh Secretariat.
Martin Raiser expressed his interest to work sincerely with the current interim government. He also appreciated the power and energy adviser for taking steps by him and requested to take effective measures to purchase energy at lower cost in the future.
The World Bank Vice President also congratulated the adviser on taking charges of three important ministries of the government.
Earlier, welcoming the delegation, the Power and Energy Adviser discussed about various activities he took to ensure transparency and accountability in the power and energy sector after assuming office.
Khan informed the WB delegation that he has given instructions to implement small projects at lower cost sooner instead of big ones.
He also emphasized on the use of renewable and environment-friendly energy.
Senior secretary at the Road Transport and Bridges Division Md Ehsanul Haque, senior secretary at the Power Division Md Habibur Rahman, Railways Secretary Abdul Baki and Energy Division Secretary Md Nurul Alam were present at the meeting.
Bhola Gas Field: Proven Reserve 2 TCF, Not 5 TCF, Energy Adviser Says
The Bhola gas field, previously reported to hold a 5 trillion cubic feet (TCF) gas reserve, has been confirmed to contain 2 TCF. Report UNB
Energy Adviser to the interim government, Muhammad Fouzul Kabir Khan, announced the findings following a review meeting on the Bhola gas field’s reserve. The earlier report of a 5 TCF reserve is incorrect. Based on accurate assessments, Bhola’s proven gas reserve stands at 2 TCF, the adviser clarified during a press conference at the Ministry on Thursday.
This announcement comes after several media outlets, citing a joint report by the Bangladesh Petroleum Exploration and Production Company Limited (Bapex) and Russian energy giant Gazprom, claimed Bhola had a recoverable gas reserve of over 5 TCF. Petrobangla, the state-owned oil and gas corporation, had also supported this report.
However, dismissing these claims, the energy adviser argued that if Bhola had such a vast reserve, the country would not be importing large quantities of gas. He emphasized that further exploration is necessary. “We will conduct seismic surveys and drilling at various locations in Bhola to determine the actual reserve. A proposal will be submitted to the Executive Committee of the National Economic Council (ECNEC) for government approval,” he said.
At the press briefing, energy experts, including Dr. M Tamim, Dr. Badrul Imam, and Petrobangla Chairman Zanendra Nath Sarker, expressed skepticism regarding the earlier reserve estimates. Bapex Managing Director Mohammad Soeb highlighted that while Bhola's Shahbazpur, Bhola, and Elisha gas fields have proven reserves of 2.047 TCF, of which 1.432 TCF is recoverable, no seismic data exists for the Char Fashion area of Bhola.
Citing Bapex and Gazprom’s seismic survey data, Soeb noted that the Char Fashion area has a 10% probability of holding 2.686 TCF of gas, while the Shahbazpur, Bhola, and Elisha fields have a similar probability of 2.423 TCF in unproven reserves. However, he underscored the importance of drilling to confirm these figures. The claim of 5.109 TCF is not valid until proven by drilling, Soeb asserted, adding that Bapex plans to propose a three-dimensional seismic survey to refine the reserve estimate.
Energy expert Dr. M Tamim explained that seismic surveys are conducted first to gauge potential reserves, but actual drilling is needed to declare proven reserves. Companies look at the seismic data to decide where gas is most likely to be found. Once drilling confirms gas, it is declared as a proven reserve, Tamim elaborated.
Dr. Badrul Imam echoed these concerns, dismissing the earlier claims. “The report suggesting 5 TCF is entirely inaccurate. It may be considered a resource, but not a proven reserve,” Imam said.
In response to questions about the energy crisis, Adviser Khan expressed optimism about improving electricity supplies, assuring that there will be no significant shortages of gas or electricity in the upcoming winter. He also pointed out that efforts are underway to secure $1 billion from the World Bank and $1 billion from the Asian Development Bank (ADB) to address the ongoing dollar crisis, which has affected gas and electricity imports.
The government is working with donor agencies to settle unpaid bills owed to private power and gas suppliers, he added, noting that this financial aid will help mitigate future energy shortages.
Russia Ensures Successful Completion of Rooppur Nuclear Project
Moscow has assured Dhaka of continued cooperation to ensure the successful completion of the Rooppur Nuclear Power Plant Project. Report BSS
The assurance was made when Russian ambassador to Bangladesh Alexander Mantytskiy paid a courtesy call on Foreign Secretary Ambassador Md. Jashim Uddin at the foreign ministry here today.
During the meeting, the foreign secretary thanked the ambassador for Russian ongoing support in the implementation of the Rooppur Nuclear Power Plant Project.
Both sides expressed satisfaction at the current state of bilateral relations between Bangladesh and the Russian Federation and committed to further strengthening ties in the coming days.
They discussed on the issues of mutual interest including energy security, food security, trade and investment, cooperation in the multilateral forum.
Bilateral cooperation in the area of ICT, education and culture were discussed at the meeting.
The foreign secretary also thanked Moscow for increasing the number of scholarships awarded to Bangladeshi students pursuing higher education in Russia and encouraged further efforts to enhance people-to-people exchanges.
The ambassador congratulated the foreign secretary on his assumption of office and reiterated Russian government support for the Interim Government of Bangladesh.
Dummy Fuel Loading Begins at Unit 1 of Rooppur NPP
A significant step towards physical start-up
Dummy Fuel Assemblies (DFA) loading into the reactor pressure vessel at unit 1 of Rooppur Nuclear Power Plant began on September 17, 2024. 163 DFAs and 115 Control and Protection System Absorber Rods (CPSAR) will be loaded within the next two weeks. Real nuclear fuel loading will begin after all the reactor parameters are met with the help of dummy assemblies. Specialists of Atomstroyexport, Atomtechenergo, and Rosenergoatom are performing the job.
A dummy fuel assembly (DFA) fully imitates the design of standard fuel assemblies in terms of dimensions, weight, and materials, but without nuclear fuel.DFAs are designed to model the geometry of the reactor core and to confirm the hydraulic parameters of the reactor plant during circulation flushing and reactor cold and hot tests, which are essential to confirm its reliable and safe operation. DFAs are also necessary to master handling operations using the refueling machine.
“Being the major technological corporation in Russia, Rosatom is demonstrating its competencies and vast experience in creating the conditions for developing new industries in its partner countries, every day. Construction of Rooppur NPP is ongoing, the start-up and adjustment works at unit-1 are in full swing. With the power plant start-up, Bangladesh will get its much-needed electricity for further development of the country”, noted Alexey Deriy, ASEVice President for Projects in Bangladesh.
Denis Muzlov, Director of Atomtechenergo Branch in Bangladesh informed, “Work on the DFA loading is being performed 24/7. Loading of one DFA into the reactor, using the refueling machine in automatic mode, takes 25 minutes on average. After the DFA loading, we will start preparing the reactor for subsequent circulation flushing and cold and hot tests.”
Rooppur NPP is being implemented with technical and financial assistance from Russia. It will host two power units with a total capacity of 2,400 MW. Russian VVER-1200 reactors have been chosen for the project. This is an evolutionary Generation III+ design reactor that fully complies with all the international safety requirements. Rosatom Engineering Division is the general designer and general contractor of the project.
Hoe Yun Jeong New ADB Country Director in Bangladesh
The Asian Development Bank (ADB) has appointed Hoe Yun Jeong as its new Country Director for Bangladesh. Report BSS
Jeong will lead ADB's operations in Bangladesh and policy dialogue with the interim government, development partners, and other stakeholders.
He will initiate the preparation of ADB's upcoming country partnership strategy (CPS) for Bangladesh, said an ADB press release.
The current CPS will end in 2025. "I look forward to working closely with the interim government and the people of Bangladesh to restore economic and fiscal stability and implement broad-based reforms critical for economic diversification and a sustained growth trajectory, including progress toward the country's long-term development goals," Jeong said.
He said, "Support for inclusive, climate-resilient, and robust development will be pursued in close collaboration with the interim government, development partners, and the people of Bangladesh to promote a more harmonious and sustainable growth process."
Jeong has 25 years of professional experience, including about 15 years in ADB. Prior to joining the bank, he held senior positions in the Republic of Korea's Ministry of Strategy and Finance.
He joined ADB in 2009 as an economist and worked extensively in regional cooperation and operations. In 2018, he moved to ADB's India Resident Mission where he served in senior roles, including as Deputy Country Director.
Jeong was instrumental in enhancing relationships with development partners, facilitating efforts to lower the cost of financing to clients, enhancing knowledge operations, and coordinating ADB's support for India's G20 Presidency.
The new ADB country director is a national of the Republic of Korea. He holds a master's degree in business administration from the University of Washington, United States, and a bachelor's degree in economics from Seoul National University, Republic of Korea.
Bangladesh became a member of ADB in 1973. ADB has committed around $61 billion in loans and grants to the country, including co-financing.
ADB's priority areas for support in Bangladesh include energy, transport, urban infrastructure, water supply and sanitation, education, agriculture and natural resources, and finance.
As of September 2024, ADB's Bangladesh portfolio includes 53 projects worth around $13 billion.
ADB is committed to achieving a prosperous, inclusive, resilient, and sustainable Asia and the Pacific, while sustaining its efforts to eradicate extreme poverty. Established in 1966, it is owned by 68 members-49 from the region.
Interim Govt Contemplating New Bond Issuance to Clear BPDB’s Dues with Pvt Power Producers
Sadrul Hasan, UNB
The interim government is considering the issuance of additional bonds to address the Bangladesh Power Development Board’s (BPDB) mounting unpaid dues to private power producers. This move aims to ease the financial strain on independent power producers (IPPs) and stabilize the country’s power sector.
According to official sources, the state-owned Bangladesh Power Development Board (BPDB) has already initiated a move in this regard and consulted with the Power Division so that it could discuss the issue with the Finance Division.
“We’ve been calculating BPDB’s dues with the private power producers, known as independent power producers (IPPs),” a top official of the BPDB told UNB.
He also noted that currently the BPDB’s total unpaid bills amount to about Tk 42,000 crore, of which the IPPs will get about Tk 7,000 crore.
Of the remaining amount, the gas bill will be about Tk 17,000 crore while state-owned public sector power plants will get Tk 10,000 crore, and Indian public and private sector including Adani Group will get Tk 8,000 crore.
Earlier, in a significant move to stabilise its power sector, the then Awami League government had secured Tk 20,620 crore through the issuance of special bonds. This initiative, aimed at clearing outstanding liabilities to private power plants, involved collaboration with two prominent private banks: City Bank and Pubali Bank.
A comprehensive agreement was inked on January 25, marking a critical step in addressing the financial challenges faced by the power sector.
As per this agreement, the government issued bonds worth Tk 19,850 crore to City Bank and Tk 77.50 crore to Pubali Bank, as confirmed by the Ministry of Finance.
Sources reveal that the government’s inability to disburse subsidy funds has left private power plants struggling to meet their financial obligations, leading some to the brink of insolvency.
To counter this crisis, the government’s issuance of special bonds comes with an 8 percent coupon rate, mirroring the repo rate set by Bangladesh Bank. Notably, any future fluctuations in the repo rate will correspondingly adjust the bond interest rate.
At the term’s end, the government will settle the bank dues along with interest, subsequently reclaiming these bonds. Unlike typical 15–20-year bonds, these special bonds have a maximum tenure of 10 years, a move tailored to the urgent needs of the power sector.
Key players in the power sector, including Summit Power, United Power, Confidence Power, Baraka, Kushiara, Doreen, and Akron Power, are among the beneficiaries of this initiative.
The Finance Division also disclosed plans for phased agreements with other banks, including BRAC Bank and Bank Asia, to further address the sector’s liabilities.
Reflecting on the agreement’s significance, managing directors of several banks expressed optimism. While banks can leverage these bonds with Bangladesh Bank, it provides the government with crucial financial breathing space.
Fouzul Seeks Swiss Investments to Expedite Bangladesh’s Development
Adviser for the Ministry of Power, Energy and Mineral Resources Muhammad Fouzul Kabir Khan today sought Switzerland's investments in Bangladesh’s business and trade to expedite its development. Report BSS
“Swiss businessmen can participate in the development efforts of Bangladesh through making investments in business and trade for the mutual benefits,” said the adviser when a delegation led by Swiss Ambassador to Bangladesh Reto Renggli paid a courtesy call on him at the ministry office at the Bangladesh secretariat here.
During the meeting, Fouzul discussed the initiatives he has taken after getting charge of the ministry to ensure transparency and accountability in the power and energy sector.
He said the Swiss companies well be welcomed to participate in various development activities of Bangladesh.
The adviser informed the delegation that he recently visited Matabari mega project, which includes deep sea port, economic zone, railways and road projects.
“But it is not possible to get real benefits from just setting up power plant, until other projects are implemented alongside. Unplanned development projects in the power and energy sector have been taken and implemented during the previous government's tenure,” he added.
In most cases, projects were implemented at a cost which was much higher than the reasonable cost, the energy adviser observed.
Fouzul said that he will give importance to implementation of small projects along with large projects at low costs.
Emphasis will also be given on renewable energy generation and use of environment-friendly energy, the adviser added.
Congratulating the adviser for getting the responsibilities of three important ministries, the Swiss ambassador said that it was a very challenging task.
The adviser expressed the hope that the measures, including the suspension of the controversial law in the power and energy sector and the cancellation of Section 34A of the BRC Act, open tender, removal of the secretaries from the post of chairman of the companies under their control, will play a significant role in ensuring transparency and accountability.
Summit LNG Terminal is Ready for Gas Supply to the National Grid
Moheshkhali, September 11, 2024 (PR) - Summit is pleased to announce that Summit LNG Terminal Co Pvt Limited (“SLNG”) is now ready for ship-to-ship transfer and regasification of LNG in order to send out 500 million cubic feet per day (mmcfd) of regasified LNG to the national grid.
Considering the national importance of SLNG to meet the demand of power, fertiliser and gas in the industrial sectors, Summit’s officials along with its international partners have been working tirelessly around the clock to resume gas supply to the national grid. During the period of over three months when Summit's FSRU was initially damaged by cyclone Remal, Summit has spent millions of dollars in repair related expenditure.
Background: On 23rd May 2024, the ship-to-ship transfer was strategically avoided due the onset of cyclone Remal. A few days later on 27th May 2024, during the peak of cyclone Remal, a stray broken floating pontoon weighing hundreds of tonnes repeatedly hit Summit’s FSRU causing damage to the ballast water tank.
After assessment of the damage to the FSRU by international expert surveyors, the FSRU with Disconnectable Cone and plugs, sailed to Singapore for dry docking. Upon repairs on 10th July 2024, the FSRU had returned from Singapore to Moheshkhali, Cox’s Bazar. On the next day, 11th July 2024, during the preparation for mooring, the FSRU with the Disconnectable Turret Mooring (DTM) plug in the subsea landing pad, there was an unexpected entanglement and damage to the DTM buoy messenger line. Soon after, MacGregor and CAN System, both Norwegian-based world renowned maritime companies and Shelf Subsea, a Singapore-based company, were all appointed by SLNG to safely moor the FSRU by rectifying the mishap of offset DTM on the subsea landing pad. At that time eastern Bangladesh was experiencing its worst floods in 34 years. The silt flowing into the sea made underwater visibility almost zero. This posed a significant obstacle to the undersea damage identification and rectification by the internationally licensed subsea diving team.
To reconnect the FSRU, the DTM plug had to be repositioned on the centre of the landing pad (located on the seafloor). Although the Anchor Handling Tug (AHT) named Coral was equipped to perform this repositioning, unfortunately, Coral was unable to exert the force required to reposition the DTM. Therefore, a stronger and higher capacity crane to move the DTM, ‘Oriental Dragon’, a Diving Support Vessel (DSV) was contracted by Summit. By the end of August 2024, the Oriental Dragon was able to complete all 35 dives and repositioned the Gravity Anchor in order for the regas and STS tests to be completed. After daunting and exhausting 131 subsea diving, engineers from Norway, Australia and the Summit LNG Terminal team restored the Terminal’s subsea assets back to normal. Today the terminal was successfully connected to the Holdback Anchors and Summit LNG Terminal is now ready for regasification and ship-to-ship operation.
