To restore normal electricity supply without further straining foreign exchange reserves, the Ministry of Commerce has permitted individual companies to import coal worth $5 million on credit annually.
The decision was made during a ministry meeting with various stakeholders on Thursday (8 June).
The move came in response to multiple companies’ requests to import larger quantities of coal on credit amidst the ongoing dollar crisis.
Tapan Kanti Ghosh, Senior Secretary of the Commerce Ministry, stated that considering the current situation, the decision was made to increase the on-credit limit for coal imports.
Importers will need permission from the ministry to avail themselves of this facility. Representatives from the Bangladesh Bank, the National Board of Revenue, the Department of Power and Energy, and the Bangladesh Trade and Tariff Commission were present at the meeting.
The existing policies allow commercial importers to bring in goods worth up to $0.5 million on credit.
However, the limit for coal imports has been raised to $50 million to meet the higher fuel requirements of coal-fired power plants.
Bangladesh has a number of coal-based power plants, including the Payra Thermal Power Station, with a capacity of 1,320MW, which recently experienced a shutdown due to a fuel crisis.
As a result, the national grid suffered a decline in electricity supply, leading to widespread load shedding throughout the country. The power plant has been importing coal on credit for an extended period, accumulating a debt of $36 million.
The Rampal Coal-based Power Plant has been unable to operate at full capacity due to a coal shortage. These power plants require thousands of tonnes of coal daily.
With the $50 million credit limit, one can only import approximately 55,000-60,000 tonnes of coal, which would sustain power plants like Payra for a maximum of 10 days. The official spoke on condition of anonymity.
