The interim government has cleared a significant portion of overdue payments to private power producers after releasing Tk 460 billion in subsidies under the revised FY25 budget, officials confirmed on Saturday.

The payout covered outstanding capacity charges and dues to independent power producers (IPPs) through December 2024. According to the Power Division and the Finance Ministry, the government still owes around Tk 130 billion to IPPs and rental plants.

Officials said the remaining arrears would be cleared by the next fiscal year. So far, payments have reached major domestic and foreign power suppliers, including Adani Power, Payra plant, Meghnaghat 450MW, Summit, Sembcorp, United Power, and Doreen Power.

The revised FY25 budget raised subsidies to Tk 620 billion from an initial Tk 360 billion, aimed at settling mounting liabilities inherited from the previous Awami League-led administration. Of the revised amount, Tk 460 billion has already been disbursed.

Power Division sources said subsidies would be drastically cut from FY26 as part of efforts to move toward a loss-free power supply system. The government’s heavy reliance on private power plants—often HFO- or diesel-based—has drawn criticism due to high generation costs.

Bangladesh paid over Tk 1.05 trillion in capacity charges to private producers since 2009. With reserves falling to $22 billion from $48 billion two years ago, officials said reducing such fiscal burdens is crucial to fulfilling commitments made to the IMF for external support.