Subsidies for Bangladesh’s power sector are projected to increase by 83% this fiscal year, potentially reaching around Tk 660 billion, up from an initial allocation of Tk 360 billion.

This surge is largely attributed to the interim government’s plan to clear outstanding arrears owed to private power producers, with an additional Tk 25,000 to Tk 30,000 crore expected to be included in the revised budget.

The finance ministry is set to finalize this allocation by March amidst challenges in meeting revenue collection targets. Consequently, funds may be redirected from the Annual Development Plan (ADP), which initially had a budget of Tk 2650 billion but could see a reduction of approximately Tk 500 billion.

Despite pressure from the International Monetary Fund (IMF) to clear these arrears by June 2025 and suggestions to increase electricity prices, the government has resisted such measures and formed committees to explore cost-reduction strategies.

Currently, the Bangladesh Power Development Board (PDB) faces arrears totaling Tk 210 billion, with private producers warning of potential production halts if payments are not made. Feel free to let me know if you need any further modifications or additional reports!