Category: Energy and Power

Bangladesh requires an annual investment of at least Tk21,750 crore to achieve its renewable energy targets by 2030, leading civil society organizations said while warning that current budgetary allocations and a restrictive tax order could derail the country’s green transition.

Speaking at a press conference on 21 June, representatives from major environmental and rights groups stated that whilst the government’s decision to remove import duties, value added tax, and advance income tax on clean energy equipment for fi scal 202627 is welcome, the current sector blueprint remains deeply flawed.

The groups highlighted that the state has earmarked only Tk379.24 crore for renewable energy – a mere 2.2% of the total Tk17,193 crore power sector allocation – leaving a massive publicprivate funding defi cit that threatens the national target of installing 10,000 megawatts of solar power by 2030.

The 2026 Bonn Climate Change Conference ended with limited progress on several key negotiation tracks, highlighting persistent divisions between developed and developing countries over climate fi nance, adaptation, and implementation ahead of the UN Climate Change Conference (COP31) in Antalya, Trkiye.

Held under the UN Framework Convention on Climate Change (UNFCCC), the meetings of the Subsidiary Body for Implementation (SBI) and the Subsidiary Body for Scientifi c and Technological Advice (SBSTA) were expected to advance decisions made at COP30 in Belém.

However, negotiators failed to agree on common negotiating texts for several major agenda items, leaving many issues unresolved for discussion at COP31.

According to the Earth Negotiations Bulletin (ENB), negotiations proved particularly diffi cult on the Global Goal on Adaptation (GGA), the Mitigation Work Program (MWP), the transition of the Adaptation Fund to exclusively serve the Paris Agreement, Just Transition, and research and systematic observation.

Big differences over climate fi nance and implementation continued to slow progress throughout the two-week conference.

One of the few notable achievements was the agreement to allow the UN Environment Program (UNEP) to continue hosting the Climate Technology Centre (CTC).

The decision ensures that developing countries will continue receiving technical assistance and technology support for climate action through 2027.

Delegates also adopted the terms of reference for reviewing the Just Transition Work Program, agreed on future work to strengthen coordination between the Technology Mechanism and the Financial Mechanism, and completed several review processes related to capacity building under the UN climate framework.

The conference took place against a challenging global backdrop marked by heightened geopolitical tensions, including disruptions to global energy markets following the closure of the Strait of Hormuz, which highlighted the energy security risks associated with continued dependence on fossil fuels.

At the same time, the World Meteorological Organization (WMO) warned that a stronger El Niño event could intensify droughts, floods, heatwaves, and other extreme weather events, while global temperatures are expected to remain at or near record levels over the next fi ve years.

Observers said the Bonn outcome reflected growing frustration over the slow pace of climate negotiations and the widening gap between climate commitments and implementation.

The limited progress means many of the most politically sensitive issues- including adaptation fi nance, emissions reduction, and support for vulnerable countries-will now be carried over to COP31, where governments will face increasing pressure to deliver concrete decisions and restore confi dence in the multilateral climate process

Energy supply has become one of the much-talked-about issues in the local and global economic arena in recent times due to the US-Israel and Iran war-led Middle Eastern crisis.

The supply chain disruption of imported fuel has brought unprecedented socioeconomic challenges.

Though the Government made various timely interventions to deal with the energy shock fallouts, we are still undergoing this transition.

Due to a large dependence on imports of non-renewable energy, energy security is receiving signifi cant attention, as it is closely tied to national economic development, long-term industrial security, and inflation.

In the modern economy, a stable energy supply is a critical component of productivity for any business or organization.

Bangladesh conventionally relies more on imported energy sources than locally available energy to support its economic activities.

Since the national budget serves as a blueprint for a country’s economic mapping, the robust budget of FY2027 is with TK.

9.38 trillion, the largest ever in the history of Bangladesh, was expected to prioritize smooth energy security linking with economic development.

Indeed, both energy security and the private sector are lifelines of our emerging economy.

However, despite the importance of energy adequacy in enabling a conducive business environment, a clear focus on energy security is the least attended to in this budget.

The energy shortfall has severely affected industrial operations, forcing hikes in electricity prices and requiring increased imports of fertilizer and other raw materials.

Additionally, the supply crunch drove up transportation costs, local supply chain management costs, and industrial expenditure.

Consequently, inflation has trended upward in recent months while other economic activities have slowed down.

Due to this concern, private investment has been crippled, dropping to 4.32%, the lowest level recorded in Bangladesh over the last three decades, leaving local investors hesitant to commit capital to emerging or potential avenues in the economy.

The overall energy budget of Tk.

17,345 crore with a nominal hike of 2.32% may not bring optimum results amidst the current economic times towards the achievement of the hugely needed economic transformation agenda.

The moves of the government, including drilling 69 wells and carrying over operations for the fi scal year, alongside establishing a strategic fuel reserve to manage emergency volatility, are apparently termed positive.

However, the lack of a comprehensive, concerted plan to overcome this volatile energy state remains unaddressed.

Furthermore, while the government is encouraging solar power and trying to promote solar-led transport systems and solar infrastructure, it has long been understood that alternative energy cannot fully secure the country’s widespread needs, as the economy is yet to be ready for complete renewable transformation.

Bangladesh lacks the natural resources for alternative or green energy to replace conventional energy-led economic operations overnight.

Compounding this, the proposed budget for the sector needs to be increased to meet growing and diversifi ed national demands.

We may also follow the austerity philosophy in other sectors to support the growing budget needs of this sector, as it is the root of other sectors.

The frequent tariff hike of electricity is not improving the state of security, but adds a cost burden for the masses.

The Energy Development fund is traditionally charged on the gas bill to meet the development cost of the energy sector, but the EDF fund created has rarely been utilised.

The previously designed Power sector master plan and later designed Integrated Energy and Power Master Plan (IEPMP) have no impact on containing the global shocks, nor any reflection in the national budget.

The budget should have a clear mapping of how the uninterrupted supply can be ensured for all energy-related economic activities.

The plan of establishing ‘Strategic Fuel Reserve’ and related storage infrastructure may add value to overcome emergency volatility to some extent.

In the ever-changing geopolitical context, our policymakers are to prioritize strategic approaches to mitigate unpleasant challenges in our best interest.

It is worth mentioning that the long-held investment gamechanger moves economic zones are not being functional as energy supply commitments are unmet.

As a result, a huge amount of local and foreign investment remains unutilized in EZs.

The industrial gas connection has been shut for almost a decade, and this prolonged decision is causing disinvestment.

The plug-and-play, rapid NSW service and other ease of doing business initiatives under the deregulation initiatives of the government in this proposed budget, without a smooth industrial gas supply, will have minimal positive impacts on reviving confi dence for local and foreign industrial investment.

The shift to renewable energy development through a rebate does not have any immediate impact, considering our current macroeconomic reality.

Considering these factors, securing a primary energy mix through domestic exploration and diversifi ed sourcing is critical to sustain industrial investment.

As the economy approaches LDC graduation, it will face signifi cant structural, regulatory, and infrastructural challenges for smooth economic transformation.

The planned economic transitional strategy of later graduation is linked to energy security as a foundational resource for export and local marketoriented industrial development.

Besides, the ‘Trillion Dollar economy’ vision by 2034 is to be embedded in core sectors of the economy, and the budget needs to align with the core targets of this vision.

In this regard, the readiness and competitiveness of the private sector through an enabling atmosphere requires intensive energy security as the key prerequisite.

To address these upcoming priority needs, the proposed ‘Power Sector Strategy Paper (2026-2050)’, a least-cost power generation plan, integrating SCADA, GIS, and Asset Management (AM), is in place.

Despite all, the question always remains whether the piecemeal planning will ease and steer our core economic visions.

For translation of these plans, predictable tax, deregulation policies, and implementation strategies backed by a fi rm commitment of governance are necessary to ensure a predictable and consistent energy supply and pricing plans, and energy-intensive businesses over the years to come.

Smooth productivity always correlates with a higher tax-to-GDP target.

We believe this large welfare-oriented budget may be implemented with the higher tax revenue stream from the dynamic and resilient private sector if they are supported by a relentless energy supply as a pressing resource.

Given the ongoing global political crises and unpredictable supply chain disruptions, we must establish clear policies and alternative supply strategies to build a balanced, supportive, and businessfriendly energy ecosystem to achieve our economic visions.

Bangladesh is reviewing a proposal to jointly develop a 683-megawatt (MW) hydropower plant with Nepal as part of efforts to increase clean energy imports from the Himalayan nation, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood told Parliament recently.

Replying to a starred question from ruling party lawmaker Fahima Nasrin (Reserved Women’s Seat29), the minister said the proposed project is currently under consideration.

‘In a bid to import more hydropower from Nepal, the issue of jointly constructing a 683MW hydropower plant is under review,’ he said.

The minister noted that Bangladesh is already importing 40MW of hydropower from Nepal under the existing energy cooperation framework between the two countries.

Bangladesh’s readymade garment (RMG) industry, the country’s largest export earner, is confronting one of its most serious operational challenges in years.

Escalating energy costs, persistent gas shortages, and unreliable electricity supplies are eroding competitiveness at a time when manufacturers are also facing tighter sustainability requirements and intense global competition.

Although the industry accepted higher gas tariffs in return for assurances of improved supply, many factories continue to struggle with production disruptions.

In an interview with Energy and Power Editor Mollah Amzad Hossain, BGMEA President and Rising Fashion Ltd.

Managing Director Mahmud Hasan Khan discusses why restoring reliable energy supplies has become essential to protecting exports, attracting investment, and sustaining millions of jobs.

How do you assess the current state of Bangladesh’s ready-made garment industry? Many believe the sector has been under severe pressure over the past three to four years and is unable to utilize its full production capacity.

What is the way forward? The garment industry is currently facing multiple challenges, but the most serious are high gas and electricity prices, coupled with the inability to obtain gas supplies in line with demand despite paying higher tariffs.

At the same time, there is no guarantee of uninterrupted, quality electricity supply.

These factors are steadily eroding Bangladesh’s competitiveness in the global apparel market.

Rising fi nancing costs and uncertainty over energy availability have become the industry’s biggest obstacles.

Many factories have already closed, while others are unable to operate at full production capacity because of inadequate gas and electricity.

The only sustainable solution is to ensure an adequate gas supply at the required pressure while guaranteeing reliable, highquality electricity.

We have repeatedly discussed these issues with successive governments and presented our recommendations, but little progress has been made.

After the current government assumed offi ce, we again highlighted the severity of the crisis.

It is important to understand that fi nancial incentives alone cannot revive struggling industries if reliable energy is unavailable.

Without addressing the energy shortage, more factories will become fi nancially distressed and eventually shut down.

Bangladesh’s garment industry has invested heavily in energy effi ciency and green energy.

Many say these investments have been driven by buyers’ sustainability requirements, yet garment prices continue to decline.

How is the industry responding? I would not say that buyer pressure is the primary reason behind these investments.

The industry has invested in energy effi ciency mainly to reduce rising production costs.

Manufacturers serving the domestic market can often pass higher energy and fi nancing costs on to consumers.

Exportoriented garment manufacturers do not have that luxury.

We must compete with other exporting countries while maintaining competitive prices in the global market.

As a result, factories are investing continuously in energy-effi cient technologies.

Today, before purchasing machinery, motors, or industrial equipment, manufacturers carefully assess their energy performance.

We will continue investing in modern technologies to improve effi ciency and remain globally competitive.

Gas and electricity prices continue to rise, while reliable electricity remains diffi cult to obtain.

Despite paying signifi cantly higher gas tariffs, industries say gas supply has actually declined.

How is this affecting production? Has BGMEA conducted any assessment? The gas shortage is placing industries under increasing pressure every day.

Many gas-fi red captive power plants cannot operate because suffi cient gas is unavailable, forcing factories to switch to diesel generators.

This has dramatically increased operating costs.

According to Petrobangla, the country’s daily gas demand is around 4,200 million cubic feet (MMCFD).

However, total supply-including domestic production and imported LNG-is only about 2,600 to 2,700 MMCFD.

At the same time, offi cials from the Energy Division have acknowledged that domestic gas production is declining by roughly 150 MMCFD each year Currently, Bangladesh’s two operational Floating Storage and Regasifi cation Units (FSRUs) have a combined regasifi cation capacity of about 1,100 MMCFD.

Although efforts are underway to increase domestic gas production, the industrial sector cannot afford to wait years for those projects to deliver results.

We accepted higher gas prices after the government assured us that supply would improve.

Instead, industries are paying more while receiving less gas.

This situation is forcing manufacturers to rely on expensive alternative fuels, weakening Bangladesh’s competitiveness in international markets.

Moreover, many factories are unable to utilize their full production capacity because of energy shortages.

There is no alternative to ensuring adequate gas and electricity supplies at competitive prices if Bangladesh wants to protect its existing industries, attract new investment, sustain exports, and preserve millions of jobs.

The government must treat this challenge as a national priority and act with the urgency of an emergency response.

Industry leaders have repeatedly called for the rapid installation of two additional Floating Storage and Regasifi cation Units (FSRUs).

Why is this so important? We have consistently urged the government to install two more FSRUs as quickly as possible to address the country’s growing gas shortage.

Unfortunately, that has not happened.

We strongly request the current government to begin work on these projects without further delay.

If the gas crisis continues, the textile and readymade garment (RMG) sectors will face even greater challenges.

BGMEA has said that rising energy prices are reducing the competitiveness of Bangladesh’s garment industry compared with countries such as Vietnam.

How can the sector overcome this challenge? Bangladesh is gradually losing its competitive edge against other garmentexporting countries, and I believe the outlook could become even more diffi cult.

Because of inadequate gas supplies, many industries have been forced to switch to LPG.

However, LPG costs nearly three times as much as natural gas, even at the current gas tariff.

The government increased gas prices with the assurance that supply would improve.

We are paying the higher prices, but the gas shortage has actually worsened.

Entrepreneurs alone cannot solve this problem.

The government must respond with the urgency of a national emergency.

At the same time, the cost of fi nancing must be reduced to help industries remain competitive.

Domestic gas production continues to decline, making increased LNG imports unavoidable.

Since LNG is more expensive, higher gas prices may also be inevitable.

How is the RMG sector preparing for this reality? No doubt, increasing LNG imports will raise the average cost of gas.

However, industries cannot survive without a reliable gas supply.

It is also important to note that industrial and captive power users are already paying the highest gas tariffs.

In my opinion, there is little room to increase gas prices for industries further, because they are already paying above the average cost of supply.

To protect employment and sustain exports, the government should maintain the current tariff while ensuring an uninterrupted gas supply according to industrial demand.

Bangladesh currently depends on imports for around 62.5 percent of its primary energy.

Experts argue that the country must invest heavily in domestic gas and coal exploration while expanding renewable energy.

Will BGMEA raise these issues with the government? The heavy dependence on imported energy is the result of previous governments’ failure to adopt effective policies for exploring and utilizing domestic gas and coal resources.

At present, however, there is no alternative to importing gas if we want to sustain existing industries and encourage new investment.

At the same time, alternative energy sources should be used in other sectors so that more natural gas can be supplied to industries.

The industrial sector is already investing in renewable energy, but renewables alone cannot meet the country’s total energy demand.

The government must take the lead in resolving this crisis.

We have already discussed these issues with the Energy Minister and hope to meet the Prime Minister soon to seek immediate action to address the energy shortage affecting industries.

We believe the government will take the necessary steps to support industrial growth and create new employment opportunities.

European markets are tightening carbon footprint requirements, with exporters expected to signifi cantly reduce emissions by 2030.

Discussions are also continuing under international climate negotiations.

Is BGMEA preparing for these new standards ahead of COP31? There is no alternative to complying with the environmental requirements of our export markets specially in Europe.

Currently, only a limited amount of renewable energy is being used in the garment industry.

To meet the 2030 targets, around 30 percent of the energy used in production will need to come from renewable sources.

Textile mills generally have large factory premises, making rooftop solar installations more practical.

However, most garment factories are vertically developed, leaving very limited rooftop space for large-scale solar generation.

As a result, garment manufacturers will need to purchase renewable electricity from utility-scale solar plants through Corporate Power Purchase Agreements (CPPAs) under the Marchant Power Policy.

However, the proposed wheeling and compensation charges of Tk 2.75 per unit are too high.

Unless the Bangladesh Energy Regulatory Commission (BERC) reduces these charges to a reasonable level, many garment manufacturers will not be able to benefi t from the scheme.

In that case, companies may have to rely on purchasing green certifi cates or similar instruments to meet buyers’ sustainability requirement

Energy Minister Iqbal Hassan Mahmood recently said that domestic fuel prices may be reduced if global rates fall to a tolerable level, though the Bangladesh Petroleum Corporation continues to incur losses of Tk 78 crore daily on fuel sales.

Answering questions in the parliament, the minister said fuel prices in the international market remain above break-even.

According to LC payments for imported fuel from March to June 11 this year, BPC’s cumulative losses stand at Tk 17,039.56 crore.

International price movements have far outpaced government price adjustments, he said.

Diesel prices on the global market rose 152 percent during the Middle East crisis, but the government increased domestic diesel prices by only 15 percent.

Similarly, octane prices climbed 82 percent internationally while domestic prices rose 21 percent.

Petroliam Nasional Bhd.and JERA Co.Inc.

have signed a new long-term LNG supply agreement, extending one of Asia’s longest-standing LNG partnerships into the 2040s.

State-owned Petronas, through its wholly owned subsidiary Petronas LNG Ltd.

(PLL), will supply up to 2 million tonnes/year (tpy) of LNG over 20 years starting in 2028, primarily sourced from Malaysia.

The agreement follows a memorandum of understanding signed in June 2025 to expand collaboration across the LNG value chain.

Petronas is a core supplier to Japan, one of the world’s largest LNG importers.

Malaysia shipped its first LNG cargo to Japan in 1983.

LNG will be delivered using Petronas’ new generation of 174,000-cu-m LNG carriers, designed to comply with the International Maritime Organization’s enhanced emissions standards.

A two-day high – level strategic roundtable on nuclear energy was held in I shwardi , Pabna, to strengthen Bangladesh’s long – term nuclear power programme, governance, policy preparedness and national stakeholder engagement.

The discussion, titled ‘High-Level Strategic Roundtable Discussion on Nuclear Energy: Strategy, Realities and Bangladesh’s Path Forward’, was held on 12 and 13 June 2026 at Swapnadweep Resort in Green City, Ishwardi, says a press release.

The Bangladesh Atomic Energy Commission and the Ministry of Science and Technology jointly organized the roundtable with support from the International Atomic Energy Agency.

Science and Technology Minister Fakir Mahbub Anam, MP, attended the programme as the chief guest.

Science and Technology Secretary Md Anwar Hossain chaired the event

Information and Broadcasting Minister Zahir Uddin Swapon has emphasized the vital role of ?lms in raising public awareness about climate change and environmental protection, describing cinema as a powerful medium for inspiring social change. ‘Films can play a highly effective role in creating awareness about climate change and environmental conservation,’ he said while addressing the closing session of the daylong Global Trend and Climate Change Film Festival (GTCF) 2026 at the National Library auditorium in Agargaon, Dhaka, on June 5.

the minister said the government prioritizes ?lms carrying messages of social transformation under its grant programme and assured that projects focusing on environmental and climate issues would receive serious consideration from the ministry.

Bangladesh’s LPG market is witnessing a sharp decline in demand as rising prices-driven by higher import costs and supply disruption s in the Middle East-continue to pressure consumers. The price of a 12kg cylinder has increased to Tk 1,940, prompting households to cut usage or shift to alternative cooking methods such as electric stoves.

industry operators report that LPG sales have dropped signi?cantly in both urban and rural areas.

in some cases, daily sales have fallen by nearly half as consumers struggle with rising living costs and in?ation. Dealers say repeated price hikes have reduced purchasing power, forcing many families-especially low and middle-income groups-to reduce consumption.