For years, when many state-owned firms incurred losses, Ashuganj Power Station Company Limited stood apart as a profitable outlier. That outperformance has since eroded. Liquidity has tightened, debt servicing on foreign loans has become harder to meet, and the company has begun liquidating bank deposits to cover operating expenses as net profit shrinks.
Built on 311 acres with German government funding in 1966, the Ashuganj thermal power plant began with two 128-megawatt units. The units entered commercial operation in 1970 on a site chosen for its strategic transport and trading links. Ashuganj Power began operating as a state-owned power producer in 2003. It now runs six gas-fired plants with a combined capacity of 1,647 megawatts — a 50-megawatt GEPP, a 225-megawatt combined-cycle power plant, a 200-megawatt modular unit owned jointly with United Enterprise, two 450-megawatt combined-cycle power plants in the south and north, and a 400-megawatt combined-cycle plant in the east.
The 225-megawatt combined-cycle plant, built at a cost of BDT 20.48 billion, entered commercial operation on April 27, 2015. Of its output, 145 megawatts come from gas turbines and 80 megawatts from a steam turbine. The plant has a 25-year operating life. It was the country’s first power project built with export credit agency (ECA) financing. Alongside Ashuganj Power, Germany’s Hermes and South Korea’s K-Sure provided ECA backing. The company borrowed $123.84 million from K-Sure. The interest rate adds a 2.7 percent margin to LIBOR, plus any mandatory charges. Hermes financed a further $69.1 million, priced at LIBOR plus a 2.2 percent margin and any other mandatory charges. In both cases, Ashuganj Power must repay instalments every six months.
Under the loan agreements, Ashuganj Power must place funds equal to the next repayment amount in a bank account in advance. By the end of June 2025, it failed to do so, according to its auditor. Md Mominul Karim, a partner at ACNABIN Chartered Accountants, audited the company’s 2024–25 financial statements. In his opinion as the auditor, he said Ashuganj Power should have held BDT 1.31 billion in its bank account by June 30, 2025, to cover loan instalments. The balance, however, stood at just BDT 165.1 million. A liquidity crunch prevented the company from meeting its reserve requirements, he said.
Bangladesh Power Development Board is the country’s single electricity buyer. It buys power from both public and private plants, and settles payments for power delivered. BPDB relies on government funds to settle those bills. Payments stall when funds do not arrive. Under these conditions, power plants’ arrears often stretch to five or six months.
BPDB Chairman Md Rezaul Karim told Bonik Barta that the organisation lacks sufficient funds to settle all outstanding claims. “Many power producers sought payments in December, including Ashuganj Power,” he said, adding, “When a company’s loan repayment falls due, we give it priority. We cannot always pay 100 percent, but we try. Ashuganj Power asked for BDT 3.5 billion of which BPDB has paid BDT 2.00 billion so far. Additional disbursements are expected this week.”
As of June 30, 2025, Ashuganj Power’s total debt stood at BDT 53.6 billion. Foreign loans accounted for BDT 46.03 billion, while borrowing from the government reached BDT 7.57 billion. Cash strain forced the company to liquidate short-term deposits to meet expenses in FY 2024–25. By the end of that fiscal year, short-term bank deposits had fallen to BDT 628.8 million, down sharply from BDT 2.48 billion a year earlier.
A review of the financial statement shows the sharpest decline in revenue and profit over the past five years came in FY 2024–25. Ashuganj Power earned BDT 22.84 billion and posted a net profit of BDT 2.47 billion in 2020–21. Revenue then slipped to BDT 22.44 billion in 2021–22, with net profit of BDT 1.87 billion. In 2022–23, revenue rose to BDT 33.81 billion and net profit reached BDT 2.45 billion. The following year marked another peak with revenue climbing to BDT 44.73 billion while net profit jumped to BDT 4.89 billion. The trend reversed in FY 2024–25 when revenue fell to BDT 38.62 billion and net profit dropped to BDT 1.94 billion.
Ashuganj Power officials blamed the fall in income on prolonged shutdowns at three of its plants. The 450-megawatt combined-cycle plant in the south was shut for four months and 24 days. The northern 450-megawatt unit stopped for 53 days. The 400-megawatt eastern plant remained offline for 10 months. Power supply to the national grid fell by 17 percent as a result over the last fiscal year.
Mohammad Abul Mansur, company secretary at Ashuganj Power, told Bonik Barta, “ECA loans require borrowers to maintain a debt service reserve for one instalment in advance. We have two such loans. One was cleared in August. The other will be settled on December 23 (today). We were meant to deposit the final instalment last June, but we could not because BPDB hadn’t paid our bills. Outstanding bills stand at about BDT 60 billion.” However, he clarified that payments have since arrived from BPDB, and the company will clear the final instalment on December 23.