Interim Government Clears 75% of Power Sector Arrears After Three Years

The interim government has significantly slashed foreign loan commitments for the power and energy sector by 75%—from $3.2 billion to just $800 million—within a span of seven months, according to Environment Adviser Syeda Rizwana Hasan. This fiscal tightening coincides with the government's move to settle longstanding dues in the sector that had piled up over nearly three years, culminating in the collapse of the previous Awami League administration.

Hasan emphasized that clearing such a massive backlog in just seven months demonstrates what can be achieved when there is genuine political will. A major beneficiary of this shift has been US-based energy giant Chevron, which supplies around half of Bangladesh's domestic gas. The interim government has fully cleared Chevron’s overdue payments, allowing the company to ramp up its operations and resume expansion projects.

In March, Energy Adviser Dr Fouzul Kabir Khan pledged to resolve all outstanding payments to foreign firms in the energy sector within two months—a promise that now appears well on track. Chevron confirmed the development in an official statement, commending the interim government, the energy ministry, and Petrobangla for resolving the arrears. The statement also framed the move as a strong signal to investors, underscoring Chevron’s long-term partnership in driving Bangladesh’s energy security and economic growth.

Chevron Bangladesh, operating three key gas fields in Sylhet—Bibiyana, Moulvibazar, and Jalalabad—had faced mounting financial pressure due to unpaid bills that reached $190 million by March. Industry sources say this backlog represented about five months of dues, as Petrobangla typically pays around $40 million per month. Between April 6 and 16, the state-run agency paid $150 million to settle most of the outstanding amount, with the delay attributed to a persistent cash crunch.

Currently, Chevron supplies about 1,108.6 million cubic feet of gas per day (MMCFD), over half of the nation’s domestic gas output of 1,873.5 MMCFD. With an additional 818.9 MMCFD of imported LNG, the total national supply now stands at 2,612 MMCFD.

Both industry insiders and Chevron officials have noted that the clearance of dues will pave the way for accelerated development in Chevron’s expanded exploration areas. Although drilling began in 2023 to boost production, progress had stalled due to the unresolved payments.