Minister of State Nasrul Hamid also highlighted a list of terms and conditions from the agreements signed between the government and private power plants receiving capacity charges.
These include ensuring 90 per cent availability annually, otherwise capacity charges will be deducted; Running annual reliability tests, and maintaining risk insurance during power plant operations.
Whether in operation or not, according to the agreements, public or private power plants receive rent, known as capacity fee.
Bangladesh has encouraged private sector investment in electricity generation since the Awami League government came to power in 2009. The country’s power generation capacity has now grown to about 23,500 MW against a domestic demand of less than 15,000 MW.
As a result, a portion of power plants receive capacity fees without even operating their plants, and this amounts to 200 billion taka annually. The payment of such capacity fee often elicits reaction from various quarters.