Bangladesh allows power plants to loan any amount from banks amid energy crisis

Banks can now lend more than 25 percent of their capital to any borrower for power generation

Published : 26 July 2022, 06:45 PM
Updated : 26 July 2022, 06:45 PM

The Bangladesh Bank has lifted the loan ceiling for power plants for the next six months in wanting to ease the ongoing energy crunch.

A bank can lend a borrower a maximum 25 percent of its capital but the power stations can now apply for any amount of loan to weather the crisis.

Fuel prices began rising around the world due to the Ukraine-Russia war and impacted the expenses for electricity production.

The Bank Company Act stipulates that a bank can lend a single customer (company, individual or group) up to 25 percent of the said bank’s capital unless said otherwise by the central bank.

The latest directive was sent out to chief executives of all banks on Tuesday.

“This opportunity has been given for the import of fuel oil and other raw materials in order to maintain an uninterrupted supply of money required for power generation,” it read.

The Bangladesh Bank will consider applications on a case-to-case basis to fix loan limits for the next six months.

Toufique Imrose Khalidi
Editor-in-Chief and Publisher