Arya News - Energy minister cites 82% private generation and rising system losses as key challenges.
DHAKA – Despite mounting debt in the power sector, the government is taking steps to avoid raising electricity prices for now, Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud Tuku said today.
He said that while electricity supply has improved, the country is carrying a heavy financial burden.
“You may say there were blackouts before and now there is electricity. But a mountain of debt has been left on the nation’s shoulders. It is better to endure hardship than to remain submerged in debt,” he said.
The minister was speaking at a programme at the Secretariat marking the handover of responsibilities to the new executive committee of the Forum for Energy Reporters Bangladesh (FERB).
Tuku said the government is working to reduce system losses in the power sector to ease growing financial pressure.
According to him, system loss stood at around 6 percent during his previous tenure from 2001 to 2006, but has since risen to 10 percent. “Our target is to bring it down to 3 percent. For now, instructions have been given to reduce it to 5 percent,” he said.
If system loss can be curtailed, the need for raising electricity tariffs would decrease, he added. “I did not say that power prices will not increase, but I do not want to raise prices. If we can control system loss, the situation will be much easier.”
The minister acknowledged that failure to reduce losses could invite pressure from international lenders, including the International Monetary Fund (IMF), potentially leading to tariff adjustments.
On the power generation mix, he said a 2004 policy had envisaged 35 percent private sector participation and 65 percent public generation. “That policy was not followed. Now private generation accounts for 82 percent. As a result, control has weakened and liabilities have piled up,” he said.
He added that the government is considering negotiations with private power producers to reach a “win-win situation”.
Addressing gas shortages, the minister said the crisis stems from inadequate exploration and production rather than mismanagement. “No new wells were drilled. Production was not increased. Gas does not appear overnight. We need time.”
He added that the government plans to intensify domestic gas exploration, including purchasing rigs and developing skilled manpower.