The Payra power plant may be temporarily closed from June 4 due to a dollar crisis affecting the payment of coal supply dues.
The power plant, a China-Bangladesh joint venture, began commercial operations in 2020, with the China National Machinery Import and Export Company (CMC) providing loans for purchasing coal from Indonesia to run the plant.
However, the disruption in coal supply occurred when CMC failed to pay outstanding bills of $390 million for coal supply until April.
Shah Abdul Hasib, the supervising engineer of the Payra Power Plant, stated: "We had to halt power generation of one unit, which has a capacity of 660MW, on May 25 due to the coal crisis. Currently, we have 40,000 tons of coal reserves, and we are currently running the second unit, producing 300MW, using the reserved coal."
He added: "We will be able to operate this unit until June 3-4, after which the second unit will also have to be shut down. This is a temporary crisis. Recently, the Bangladesh government has agreed to provide $100 million, and our Chinese partner CMC has also agreed to open a letter of credit for coal."
However, if the letter of credit is opened on June 1, it will take an additional 25 days to receive the coal supply from Indonesia, potentially leading to a halt in power generation. As a result, the country may face a shortage of power supply from June 4.
Collected Payra Power Plant authorities stated that the production cost per unit is Tk9, including Tk5.50 for fuel expenses, making it the lowest-cost option after gas-based electricity in the country. The cost of electricity generation in this coal-fired plant includes purchasing coal from Indonesia at $127 per ton, covering the cost of coal at $90 per ton, shipping expenses, taxes, and incidental costs of $27.
The outstanding dues amounting to Tk6,500 crore for electricity subsidy to the Bangladesh Power Development Board (BPDB), along with the scarcity of dollars at the Bangladesh Bank, have resulted in delayed coal supply to the Payra power plant. It should be noted that oil-fired power plants cost an average of Tk4 more per unit compared to coal-fired plants.
The Payra power plant produces an average of Tk3 crore units of electricity per day. If the oil-fired power plants need to compensate for the disrupted supply from the Payra Plant, there will be a daily loss of Tk12 crore. This means a financial loss of Tk300 crore over 25 days.
Bangladesh Chinese Power Company Managing Director AM Khorshedul Alam stated: "Payra plant has already reduced its production from 1300MW to 300MW and is running with the existing stock of coal. This reduced production will continue until June 3, after which the plant's production may be temporarily halted."
He added: "We have informed our partner that the Bangladesh Bank has agreed to pay $100 million within this month to partially settle the $390 billion dues for coal supply."
The CMC has obtained approval from the Foreign Credit Control Authority of the Chinese government to open a letter of credit for importing coal to sustain production for the next two months until the end of July, according to Khorshedul Alam.
Over the past few months, 800MW of electricity was being supplied from the Payra Power Plant to Dhaka. If the Payra Power Plant is closed, the electricity supply to Dhaka will be reduced by 1,244MW per day.
In the event of the closure, Dhaka will have no choice but to resort to load shedding. However, if the production from liquid fuel-based power plants is increased to compensate, a substantial financial loss will be incurred.
