6-6-2023 (DHAKA) Bangladesh’s largest power plant, the 1,320-megawatt Payra Power Plant, was shut down on Monday (Jun 5) due to a lack of funds to buy the coal necessary to fuel it. The government-run plant had already reduced production last month because of fuel shortages, but it was forced to halt operations completely, said manager Shah Abdul Mawla. He added that he hoped production would resume within three weeks when coal shipments arrived. The country is struggling with a depreciating currency, with foreign exchange reserves falling from US$46 billion in January last year to $30 billion at the end of April this year. The inflation rate of around 9.9% is thought to be much higher by independent economists.
The sweltering heatwave in Bangladesh has increased electricity demand, causing nationwide blackouts of up to five hours a day. On Monday, the government closed primary schools until Thursday to combat the heat, as the temperature rose to 41.1 degrees Celsius. The Power Grid Company of Bangladesh said the country was experiencing a “2,500 MW shortage of electricity in the national grid”, compared to 2,200 MW the day before, with daily demand around 16,000 MW. Minister for Power Nasrul Hamid said that the situation “may remain for another two weeks”, blaming “economic factors” including securing letters of credit.
The power cuts have drawn criticism from opposition parties. Ruhul Kabir Rizvi, a senior leader of the main opposition Bangladesh Nationalist Party, said, “The entire country is almost without electricity. People are getting sick in extreme heat.” The frequent blackouts threaten Bangladesh’s crucial apparel sector, which accounts for more than 80% of its exports, including to Walmart, Gap, H&M, VF, Zara and American Eagle Outfitters. The loss of exports will exacerbate issues around its dollar reserves that have fallen nearly a third in the 12 months to the end of April, to a seven-year low, and limited its ability to pay for fuel imports.
