Payra Thermal Power Plant in Bangladesh Resumes Production After Coal Shortage

Bangladesh’s largest power plant has resumed production on 25 June 2023 after a 20-day hiatus caused by a shortage of coal. The Payra thermal power plant, jointly owned by Bangladeshi state-owned Northwest Power Generation Company Limited (NWPGCL) and Chinese state-owned China National Machinery Import and Export Corporation (CMC), is operated by Bangladesh-China Power Company Limited (BCPCL).

The re-opening of the plant will be gradual and an initial coal shipment has been received from Indonesia on 22 June. Additional efforts are underway to regain full operational capacity, including the opening of LCs supporting 17 ships for the import of 730,000 tons of coal over the next seven
weeks.

Coal supply had been interrupted due to about USD 393 million owed to the Indonesian company, causing a dollar crisis. CMC has since paid the outstanding coal payment.

From published reporting by Bangladesh’s Kalerkantho on 25 June, the timing of CMC’s payment of the outstanding amount in relation to payment for 22 June shipment is unclear.

The daily news source reported:

“According to the agreement, CMC has a six-month grace period to pay Bangladesh for the coal purchase. However, due to the dollar crisis, the Payra authorities were unable to settle the dues even after six months. The Chinese foreign exchange regulator has now prohibited CMC from opening new LCs for coal purchases due to the significant arrears. As a result, BCPCL faced challenges in coal importation. The government stepped in and settled the nearly $100 million bill promptly, allowing for the resumption of coal imports.”