Ahead of the national elections, Bangladesh will pay hundreds of millions of electricity bills.

Starting in July, Bangladesh plans to pay around $960 million each month to settle its debts to LNG suppliers, international oil companies (IOCs), and owners of power plants. Following a direction from Prime Minister Sheikh Hasina, the choice was made ahead of the nation's scheduled elections the following year.

Bangladesh power bill row: What is the payment structure like?

Each week, the Ministry of Power, Energy, and Mineral Resources (MPEMR) is going to give $160 million to the Power Division for payments to power plant owners, and $80 million to the Energy and Mineral Resources Division (EMRD) for payments to LNG suppliers and IOCs.

Zanendra Nath Sarker, the chairman of Petrobangla, highlighted the need to pay off debts owed to IOCs and LNG suppliers to maintain ongoing natural gas supply. For the fiscal year 2023–2024, the MPEMR's Power Division has also asked almost $5.921 billion to guarantee a constant supply of power.

Bangladesh seeks support from international lenders

Bangladesh wants to pay off its energy debt with the help of international lenders despite its financial difficulties to prevent delays before the next general election in January 2024.

The Islamic Trade Finance Corporation is interested in funding $500 million to Petrobangla.

The government owes private independent power producers nearly $2.4 billion as of June, as well as $475 million for energy imported from India, $350 million to gas businesses, and $320 million to LNG suppliers.

Bangladesh is making efforts to draw in international investors in addition to clearing bills that remain unpaid.

The nation's first-ever production-sharing management that relates to Brent crude was recently authorized by the cabinet committee on finances.

This new profit-sharing-based model offers investors greater production shares and permits companies to export natural gas after fulfilling domestic demand. The model contract's hydrocarbon pricing is based on the same benchmark used to buy LNG.

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