Power, Energy, and Mineral Resources Advisor Fouzul Kabir Khan has alleged that major corporations such as Beximco and S Alam Group are facing severe financial instability despite borrowing billions of takas. He claimed that their accounts remain empty, with banks relying on balance sheets instead of verifying the financial capacity of borrowers.

Speaking at a seminar titled “Rapid Transition to Renewables: Role of Domestic Financial Institutions,” jointly organized by the Economic Reporters' Forum (ERF), the Centre for Environmental and Participatory Research (CEPR), and the Coastal Livelihood and Environmental Action Network (CLEAN), Khan highlighted the growing financial mismanagement in the country.

“Banks have been issuing loans based on balance sheets, often making decisions casually without properly verifying the borrower’s capacity,” Khan said. "This approach has led to nearly Tk 3 trillion in non-performing loans."

Khan revealed that both Beximco and S Alam Group borrowed billions but now lack the funds to pay their employees, with financial reports showing no actual cash, just figures on balance sheets.

Beximco employees, in protest, have taken to the streets demanding unpaid wages, while the government had to intervene, providing loans to settle the overdue payments. Similarly, the situation at S Alam Group is reported to be dire, with the company's chairman allegedly fleeing to Singapore after having controlled eight private banks during the tenure of the Awami League government.

The collapse of the Awami League government following a mass uprising on August 5 has brought attention to the issues plaguing businesses linked to the former administration. Former Prime Minister Sheikh Hasina has fled the country, and Salman F. Rahman, her private industry and investment advisor, is currently imprisoned over charges related to a student murder case.

S Alam’s departure to Singapore has prompted him to send letters to the interim government seeking support to salvage his industrial ventures. Meanwhile, labor unrest continues at Beximco Industrial Park, where workers are demanding their salaries.

The government has set up a high-level committee comprising advisors from various ministries to investigate the ongoing crisis.

Transparency in Public Procurement

In his address, Fouzul emphasized the need for transparency in public procurement. “We want all government goods and services procured through open, competitive processes. Ministers, their relatives, or senior officials should no longer have a say in who gets the contracts,” he said, aiming to reduce corruption and favoritism.

Fouzul also criticized the Energy Act of 2010, calling it a tool for corruption. “This law allowed contracts to be awarded without tenders, offering immunity to energy sector businessmen, ministers, and bureaucrats. This led to widespread corruption,” he stated. Under the interim government, this law has been repealed, reverting to the Bangladesh Public Procurement Authority Act of 2023, which will ensure transparency in the tender process.

New Policies for Electricity Procurement and Renewable Energy

The energy advisor announced the abolition of the Independent Power Producer (IPP) policy, under which the government bought electricity from private power plants. The proposed Merchant Power Policy (MPP) will require private plants to secure their own consumers, although the government may still purchase electricity if necessary.

Private plants will be allowed to use the national grid on a rental basis, with payments for transmission line usage. The government will also construct interconnections or transmission lines in industrial zones if needed.

“We have prepared a draft of the MPP, which will be published soon,” said Fouzul. The government is awaiting the full verdict from the High Court on the IPP policy's repeal before finalizing the new policy.

Fouzul also addressed concerns about land scarcity hindering the growth of renewable energy. He pointed out that ministries such as the railway own large, unused lands, which can be repurposed for renewable energy production.

The government is also preparing land for industrial use, adopting a plug-and-play model to allow businesses to set up factories quickly. Additionally, with renewable energy becoming a requirement for garment industry suppliers, the energy advisor highlighted that H&M, a major buyer of Bangladeshi garments, now mandates that 15% of the electricity used in partner factories come from renewable sources. The United Nations is expected to endorse this requirement.

Fouzul estimated that meeting these demands would require between 2,500 and 7,000 megawatts of renewable energy. “There is no alternative but to invest in renewable energy,” he concluded.

He urged banks to seize investment opportunities in the renewable energy sector. “By providing loans against assets, banks can ensure profitability and secure loan repayments,” he said.

At the seminar, CPD Research Director Khondaker Golam Moazzem emphasized the need for large-scale investments in renewable energy and suggested collaboration with 18 international financing institutions already active in the sector.