Despite a nationwide natural gas crisis, the government has approved the commercial operation date (COD) of the 718MW Meghnaghat gas-based power plant, operated by JERA, by June 15, 2025—during the Eid-ul-Azha holidays—on the condition of tariff renegotiation.

The Power Division issued an official order on June 2, asking JERA Meghnaghat Power Ltd (JMPL) to complete COD procedures by June 16 in coordination with Titas Gas Transmission and Distribution Company, and with consent from the Bangladesh Power Development Board (BPDB).

The Power Purchase Agreement (PPA) will be amended to incorporate a revised tariff proposal submitted by JERA on May 20, which includes a 10% discount on the reference foreign variable operation and maintenance (VOM) cost—ranging from Tk 489 crore at 84.6% plant factor to Tk 250 crore at 40% capacity. However, a Power Division official noted dissatisfaction with the proposal, insisting on a further reduction.

BPDB Chairman Rezanur Rahman said the amended PPA will enable settlement of both pre- and post-COD invoices and that tariff renegotiations will take place following lender consent. He added that the gas supply to other gas-based plants will be rationed during both the pre-COD and post-COD phases of the power plant.

Bangladesh currently supplies around 2,700 million cubic feet per day (mmcfd) of gas, against a national demand of 3,700 mmcfd.

JERA Pushes for Gas Supply to Avert Default

JERA, backed by Japan’s JBIC, ADB, and other lenders, has repeatedly sought uninterrupted gas supply to commission the plant, which has been ready since March 2024. CFO Takao Onuki warned that delays have already triggered loan repayments from June 2023, forcing JERA to inject additional equity to avoid default.

In letters to the Power Division, JERA said it needs 7–10 days of continuous gas—starting at 60 mmcfd, increasing to 130 mmcfd—to complete final testing. The company has offered a 10% cut in annual maintenance costs (Tk 8 crore) as part of efforts to secure gas and achieve COD. BPDB warned the government may face up to Tk 100 crore in monthly capacity charges if the plant remains idle.

ADB Defends Project Viability

In response to criticism, ADB defended its involvement, saying projects like Meghnaghat and Rupsha underwent “rigorous due diligence” and align with Bangladesh’s energy goals. The ADB added that both projects were deemed technically and financially viable, backed by strong sponsors like JERA and Siemens, with government guarantees in place for payment obligations.

CAB Criticizes Power Sector Burden

Professor Shamsul Alam, Energy Adviser at the Consumer Association of Bangladesh (CAB), criticized the ADB-backed Meghnaghat and Rupsha projects, calling them “bad loans” that have inflated power tariffs and subsidy burdens. “These projects have proven financially unviable and have strained the power sector without delivering expected benefits,” he said.

News Link: Govt clears JERA Meghnaghat Plant for operation by June 15