Category: Energy and Power

Analysis by energy advisory service Montel fi nds Germany, France and the Netherlands all saw record levels of renewables curtailment last year, with the build out of solar in each market contributing to midday generation peaks and consequential price cannibalization. Germany, France and the Netherlands cut a cumulative 3.9 TWh of renewable energy last year, according to analysis by energy advisory service Montel Analytics. Montel’s European price sensitive curtailment report covers commercial curtailment volumes across ten European markets. Germany, France and the Netherlands account for over 80% of the cut volumes across the ten countries monitored in the report, each setting new records for curtailed renewable energy in 2025.

The three countries also set new records for hours of negative day ahead prices last year, with Germany recording 539, France 509 and the Netherlands 584. Germany curtailed 1,749.7 GWh of renewables in 2025, almost 25% higher than in 2024 and above its record set in 2020.

India has announced a major expansion in upstream opportunities with the launch of 50 new exploration and production (EandP) blocks across oil, gas and coal bed methane (CBM) assets, according to various news reports.

In a social media post on X, this move was described by Petroleum and Natural Gas Minister Hardeep Singh Puri as a ‘transformative milestone’ for the country’s energy sector.

The offer includes 25 blocks under the latest Open Acreage Licensing Policy, spanning roughly 1.83 lakh sq km across onshore, shallow-water, deepwater and ultradeepwater areas. Key features include retained exploration rights for the full contract duration, reduced offshore royalties and revenue-sharing provisions designed to incentivize early-stage development.

Bangladesh’s energy crisis is no longer a distant policy concern.

It is a daily reality for industries, power plants, and households alike.

As the new government prepares to take offi ce, it inherits a widening gas supply gap that cannot be closed overnight. Domestic production is declining, drilling efforts are yielding limited results, and import infrastructure remains constrained after key LNG contracts were canceled during the interim period. Former BAPEX Managing Director Mortuza Ahmad Faruque believes the country must confront this reality with urgency and realism.

In a candid conversation with Energy and Power Editor Mollah Amzad Hossain, he argues that without rapid expansion of LNG capacity and a coordinated strategy for domestic exploration, Bangladesh’s energy shortfall will deepen, putting industrial recovery and economic stability at risk.

After winning the election, the BNP alliance is set to form the government, with Party Chairman Tarique Rahman expected to assume offi ce as Prime Minister. What challenges will the new administration face in the energy sector at the outset, and what preparations are necessary to address them?

Energy, particularly natural gas, is currently the most pressing challenge. Demand continues to rise, while domestic production is steadily declining.

At the same time, imports cannot be signifi cantly increased due to infrastructure constraints. Gas demand will climb further during Ramadan, the irrigation season, and the summer months, driven by higher industrial consumption and increased power generation needs. Domestic production now stands at about 1,700 MMCFD, while average LNG imports range between 900 and 1,000 MMCFD.

As a result, total supply cannot exceed 2,700 MMCFD, compared with the demand of roughly 4,000 MMCFD. Under these circumstances, the crisis cannot be resolved quickly.

There is also no assurance that the ongoing drilling programs will deliver rapid results or even maintain domestic production at its current level. Meanwhile, there is no alternative to ensuring a secure energy supply if the government hopes to revive stagnant industrial output and restore economic momentum.

To that end, expanding LNG import infrastructure must become a priority.

At the same time, oil and gas exploration under domestic investment must be accelerated.

The draft Production Sharing Contract (PSC) should be fi nalized on an urgent basis, and tenders should be invited promptly for both onshore and offshore blocks.

Resolving the accumulated challenges in the gas sector will not be easy.

The new government must approach this crisis with a sense of urgency comparable to wartime mobilization. Primary energy – particularly gas, coal, and LPG – has become Bangladesh’s most pressing crisis.

The shortfall in piped gas supply now stands at about 1,300 MMCFD.

All coal used for coal-fi red power generation is fully dependent on imports.

Even with LNG imports, total gas demand still cannot be met.

To ease the crisis, what steps should the government prioritize in its fi rst year?

System loss in the gas sector has been rising since 2020.

As a result, nearly 150 MMCFD of gas is being wasted. Without delay, the government must reduce system loss to internationally acceptable levels. Doing so could increase effective supply by at least 100 MMCFD.

In my view, achieving this would deliver the quickest results and should therefore be the government’s top priority.

In the medium term, oil and gas exploration must receive renewed emphasis. While ongoing efforts under domestic investment should continue, foreign investment must also be secured for exploration in offshore areas, the Chittagong Hill Tracts, and other onshore regions. During the interim government’s tenure, investor confi dence weakened, limiting progress.

To reduce the average cost of electricity, the government should also explore opportunities to import power at competitive prices from neighboring countries.

Bangladesh currently operates around 7,000 MW of coal-fi red power capacity, all fueled by imported coal.

A policy decision is needed on how and how quickly domestic coal production can reduce this import dependence. LPG is another critical energy source.

However, due to the failure to establish bulk import infrastructure, consumer prices remain high.

Rapid initiatives are needed-whether in the public or private sector-to develop this infrastructure.

A new project has also been undertaken to expand refi nery capacity.

It must be ensured that this expansion supports increased LPG supply, thereby reducing import dependence. Finally, to achieve universal clean cooking by 2030, the LPG sector must have access to low-cost fi nancing.

The government should also explore opportunities to mobilize green funds to support investment in this sector.

In the combined power and energy sector, import dependence currently stands at 56%. Last year, total spending on imports and debt servicing exceeded $20 billion.

This year, it could rise to $24 billion. What do you expect from the new government to prevent import dependence from increasing further?

Reducing import dependence is an extremely diffi cult task.

The current situation is the result of nearly two decades of limited progress in domestic gas and coal exploration, along with insuffi cient expansion of renewable energy.

As things stand, the country’s energy demand cannot be met without imports.

At the same time, a reliable energy supply must be ensured to sustain export growth and strengthen remittance infl ows, so that energy and power imports are not disrupted by foreign currency shortages.

The plan to drill a total of 150 wells- including 60 exploration wells-by 2028 through domestic initiatives and investment is now being implemented.

So far, however, only 20 wells have been drilled, and this has not signifi cantly improved the gas supply situation.

How should this be evaluated?

The ongoing program to drill 50 wells initially and eventually 100 wells through domestic investment is scheduled for completion by 2028.

In my view, however, the full program-including 54 exploration wells-is unlikely to be completed within the stipulated timeframe.

Relying solely on BAPEX and contractors appointed by national companies may not deliver the expected results. Consequently, the target of adding 1,400 MMCFD of gas supply from this initiative is unlikely to be achieved, and domestic gas production capacity may continue to decline.

The new government’s energy minister should conduct both a technical and managerial review of the program and adopt an integrated approach to ensure that the entire initiative can realistically be completed by 2028. What kind of initiatives would you advise the government to take in order to conduct large-scale domestic gas exploration-both onshore and offshore?

The interim government wasted time in this sector.

Although Petrobangla fi nalized the draft for bidding in oil and gas exploration, both offshore and onshore, the government did not approve it.

In my view, the new government should fi nalize it within the fi rst month, and based on that, should invite international tenders. For this, it must fi nalize which onshore blocks, including those in the Chittagong Hill Tracts, will be opened for foreign investment.

Again, in the Bay of Bengal, in the changed global context, IOC companies cannot be attracted only through bidding.

Instead, PSCs should be signed through negotiations with companies like ExxonMobil, Statoil, and others that have shown interest.

However, it must be remembered that no company will invest if only one or two deep offshore blocks are offered.

They must be given a larger number of blocks.

The legal dispute with Niko has now been resolved.

Therefore, without wasting any time, the 3D seismic survey work in the Chhatak fi eld must be completed, and exploration should proceed based on that.

This is a promising fi eld. Many believe there is potential for more than 1 TCF of gas here.

If work can start within the next two months, success could come within a year, making a major contribution to addressing the current shortage.

Bhola Island and the surrounding region are also highly promising.

The reserve there is around 2.5-3 TCF.

Therefore, before production from the country’s largest gas fi eld, Bibiyana, declines further, Bhola must be connected to the national gas grid.

If this project is linked with the Bhola-Barishal bridge, both risk and cost will be reduced. What initiatives do you think are urgently necessary to rapidly increase production capacity from domestic gas fi elds?

The opportunities to increase production from domestic fi elds have already been utilized, and further work is ongoing.

But IOCs develop their fi elds in one go and then move into production, which is why their per-well production capacity is much higher. Domestic fi elds have not been developed in that planned way.

As a result, I do not think that trying to rapidly increase production from domestic reserves will necessarily succeed. What decision should the current government take regarding domestic coal exploration and use?

In the changed global context, attracting investment for coal extraction is a major challenge. What do you say?

Look, there is no alternative to developing and extracting domestic coal in order to reduce pressure from imports.

This is because domestic gas reserves are declining rapidly.

In that situation, coal will make a major contribution to ensuring energy security.

The Scheme of Development for the Phulbari coal mine is already in the government’s hands. First, the government must take a political decision to proceed with coal development and extraction.

Then, this Scheme of Development should be reviewed by an internationally neutral consulting fi rm.

If a quick decision is taken, it will be possible to extract and use Phulbari coal within three years.

After Phulbari, attention should gradually shift to other reserves. Coal investment is challenging in the changed global context.

However, many countries around the world are still interested in investing in coal mining.

It is being said that there is no way for Bangladesh to overcome the gas crisis without rapidly expanding LNG import infrastructure.

The interim government cancelled the contract for installing an FSRU and suspended negotiations. Negotiations for importing LNG from India have also been cancelled. Do you think the new government should review the entire matter?

There is no alternative to expanding LNG import infrastructure to deal with the gas crisis.

Therefore, the cancelled contracts and negotiations should be reviewed by the new government’s energy division.

That would allow LNG import capacity to increase in the shortest possible time, faster than launching new initiatives. Currently, the capacity is 1,100 MMCFD.

If it cannot be increased to 2,000 MMCFD by 2028, the crisis will become even more severe.

At the same time, to ensure the rapid establishment of a land-based LNG terminal, the project sponsor should be fi nalized within this year, because construction will take 5 to 7 years. What advice would you give the new government to improve management in the gas sector?

For a long time, board members and managers have been appointed based on political considerations.

The interim government, in the name of reforms, has created even more new crises.

Therefore, the new government should appoint management positions based on competence and restructure the boards with experts from this sector. Of course, there should be representation from the energy division-but not as excessively as it is now. What do you think about fi nalizing the Energy and Gas Supply Master Plan?

Look, the true picture of year-round gas demand and supply was not properly refl ected in the 2017 Gas Sector Master Plan or the 2023 Energy and Power Master Plan.

Therefore, the new government should ensure long-term gas demand and supply issues through stakeholder consultations.

Based on that, if work is done with 2-year, 3-year, and 5-year plans, success can be achieved more quickly.

The World Trade Organization has faulted the United States in a dispute brought by China over US green energy subsidies, in a ruling slammed by Washington on Friday as ‘absurd’.

The global trade body’s dispute panel said that large tax credits granted under former president Joe Biden’s landmark climate law, the Infl ation Reduction Act (IRA), were ‘inconsistent’ with several WTO agreements and should be withdrawn.

That law, which was signed by Biden in 2022, was the largest climate investment in US history, but it has been dramatically eroded since President Donald Trump came to power last year. China hailed the panel ruling as ‘objective and impartial’.

But US Trade Representative Jamieson Greer was harshly critical, saying in a statement that the ruling showed that ‘existing WTO rules are inadequate to address massive and harmful excess capacity in numerous sectors, including in energy technology’.

It ‘underscores the serious doubts that the United States has long expressed regarding the capacity of the WTO to regulate trade in a world marked by severe and sustained trade imbalances’, he said.

Despite import of liquefi ed petroleum gas (LPG) more than the consumption requirement for the JulyDecember period of 2025, consumers are experiencing a severe supply crunch of the fuel, raising questions about market transparency and regulatory oversight.

However, the monthly imports have been highly uneven, which could also be one of the reasons for the ongoing crisis. During the period under review, LPG imports reached an average of 152,818 MT per month, with September recording the highest infl ow and November the lowest. Despite import of LPG in suffi cient volume, consumers across the country have been facing an ‘artifi cial’ shortage, with retail prices spiraling out of control. Data from the National Board of Revenue (NBR) shows that total imports for the 2025 calendar year stood at over 1.42 million MT, averaging about 118,622 MT per month.

A major concern highlighted by market insiders is the narrowing of the import base.

India will allocate 200bn rupees ($2.2bn) over the next fi ve years for carbon capture, utilization and storage (CCUS), the government said in its 2026-27 federal budget presented on 1 February.

The funding would support the scaling up of CCUS technologies to reduce the carbon intensity of industrial production, particularly in hard-to-abate sectors, fi nance minister Nirmala Sitharaman said in her budget speech.

The budget links the proposed outlay to a national CCUS research and development roadmap launched in December 2025, which aims to raise the technology readiness level of CCUS applications from laboratory and pilot stages to deployment in industrial settings. Geological assessments cited in the national CCUS roadmap estimate over 390mn t of CO2 storage potential, including 291mn t in deep saline aquifers, 97mn-316mn t in Deccan and Rajmahal basalt formations, and around 1.2mn t of viable storage through enhanced oil recovery (EOR) in mature oilfi elds.

T he verdict of the 2026 national parliamentary election has reshaped Bangladesh’s political landscape.

The Bangladesh Nationalist Party (BNP) secured a commanding two-thirds majority, winning 209 of the 297 declared seats.

Two results remain suspended, and one constituency did not vote following the death of a candidate. Jamaat-e-Islami Bangladesh won 68 seats; independent candidates secured 7; other parties claimed 7; and the NCP captured 6 seats. With this decisive mandate, the BNP, together with its alliance partners, is set to form the next government.

BNP Chairman Tarique Rahman is confi rmed to assume offi ce as Prime Minister, and the new administration is expected to begin work in the second half of February.

Attention is already turning to who will take charge of the crucial power and energy ministry. While no formal announcement has been made, discussions suggest that an experienced Member of Parliament with a background in the sector may be entrusted with the role. Whoever assumes responsibility will step into offi ce at a particularly diffi cult moment.

The BNP’s election manifesto promised to build a corruption-free, transparent, and people-centered power and energy system.

It also pledged to investigate irregularities and corruption over the past 17 years and hold those responsible accountable.

The outgoing interim government, which served for 18 months, struggled to resolve the sector’s deep-rooted problems and, according to many observers, left behind new complications.

In January, it released a report detailing alleged irregularities, especially in the power sector, under the previous administration.

However, the energy adviser later acknowledged that there was not enough time to act on the fi ndings. Now, expectations are high that the new government will move forward based on that report.

At the same time, experts caution that it may add to the incoming administration’s workload.

They argue that the report must be carefully reviewed before major policy decisions are taken, noting that several measures adopted during the interim period appeared driven more by political considerations and public perception than by long-term structural reform. Current Situation and Necessary Actions Experts believe that Bangladesh’s power and energy sector is facing its most critical situation in the past three decades. Key challenges include heavy dependence on imports, mounting arrears in the power sector, and politicized administration and management across corporations and state-owned companies.

The new government’s fi rst major task will be to restructure administration, governance, and management in the power and energy sector, as the existing framework is widely viewed as unsupportive of meaningful reform.

Immediately after assuming offi ce, the government will confront the combined pressures of Ramadan, the irrigation season, and the summer peak demand period.

Temperatures have been rising since January.

Ensuring a loadshedding-free electricity supply during Ramadan will be essential.

However, doing so will require keeping furnace oil-based power plants in operation. Private power producers are owed approximately Tk 14,000 crore and have stated that they cannot continue operating without receiving their overdue payments.

Total arrears in the power sector have now climbed to around Tk 30,000 crore.

Although installed generation capacity exceeds 28,000 MW, fuel shortages and unpaid bills could create serious challenges during the summer months. Moreover, the new government will have to manage this situation within the administrative structure inherited from the interim administration.

At the same time, shortages of piped gas for cooking persist, along with supply constraints in LPG.

An LPG crisis that began several months ago remains unresolved, placing additional pressure on the new government to address both piped gas shortages and disruptions in LPG supply. Medium- and Long-Term Priorities In the medium and long term, gas exploration must be accelerated.

Alongside increasing domestic investment, Production Sharing Contracts (PSCs) should be fi nalized to attract foreign investors.

International tenders must be invited for both offshore and onshore oil and gas exploration. Domestic gas alone cannot resolve the crisis.

Existing infrastructure limits LNG supply to no more than 1,050 MMCFD.

Therefore, LNG import infrastructure must be expanded on an urgent basis.

At the same time, the process of selecting investors for land-based LNG terminals should begin to ensure longterm supply security. Coal-fi red power plants must secure adequate fi nancing for coal imports to operate at full capacity.

Simultaneously, policy decisions are required to develop and utilize domestic coal resources to reduce import dependence.

To fulfi ll its election manifesto commitments, the government must also adopt targeted programs to expand renewable energy. Within its fi rst six months in offi ce, it should announce short, medium-, and long-term action plans for the sector.

Role of the Interim Government Following the fall of the Awami League government, the interim administration remained in power for 18 months. During this period, Muhammad Fouzul Kabir Khan served as adviser to the Ministry of Power, Energy, and Mineral Resources.

Although several reform initiatives were announced, they failed to reduce fi nancial losses in the power sector. Key issues-such as tariff adjustments, LNG import costs, and reductions in capacity charges-remained unresolved.

Instead, fi nancial losses at the Bangladesh Power Development Board (BPDB), the single buyer of electricity, continued to increase. Just three days before the election, the Bangladesh Independent Power Producers Association (BIPPA) warned the media that unless at least 60% of outstanding arrears were paid before Ramadan, it would be diffi cult to keep power plants in operation.

The interim government did not respond to this appeal. One major source of fi nancial strain in the power sector has been the continuation of large-scale projects with questionable necessity.

Experts caution that unless the BNP government reviews these projects based on effi ciency and economic viability, fi nancial pressure will persist.

The greatest challenge in making the power sector sustainable lies in reducing subsidies and restoring fi nancial discipline. Over the past fi ve fi scal years (FY 2021-22 to FY 2025-26), Tk 206,482 crore has been allocated in subsidies to the power sector.

In the current fi scal year alone, Tk 37,000 crore has been allocated.

Although the interim government reduced subsidy allocations this fi scal year, BPDB’s net losses have still exceeded Tk 17,000 crore. Despite some cost-saving measures, the single-buyer utility is now close to fi nancial collapse.

Experts believe that rescuing the power sector from this situation will require the BNP government to undertake comprehensive structural reforms.

Review of Adani Contract After assuming offi ce, the interim government formed a national committee to review the power purchase agreements (PPAs) of largecapacity power plants, including Adani’s.

The committee reported signifi cant irregularities in Adani’s contract and, based on the information gathered, suggested that Bangladesh could consider fi ling a case against Adani in an international court.

There had been expectations that the interim government would cancel the Adani power purchase agreement and, thereby, assist the incoming political government.

However, it was observed that about a month before the end of its tenure, the interim government submitted the report and left the matter for the new political government to handle. Gas and Electricity Situation Currently, daily gas demand in the country stands at about 4,000 million cubic feet (MMCFD).

However, including LNG imports and domestic production, the average total supply is slightly above 2,600 MMCFD. Due to continuous rationing, industries, power plants, residential consumers, and other sectors are suffering.

The situation worsens during Ramadan, the irrigation season, and summer.

Energy experts believe that managing this situation during the current Ramadan and irrigation season will be a major challenge for the new government.

Electricity demand rises signifi cantly during Ramadan.

At present, peak evening demand is around 12,500 MW. Within the next few days, demand may increase by another 4,000 MW, bringing total demand to approximately 16,500 MW. Offi cials from the Ministry of Power, Energy and Mineral Resources said that to maintain a normal power supply and address load-shedding, LNG imports are continuing according to decisions made by the interim government. Meetings have also been held to ensure that coalfi red power plants remain operational around the clock to meet demand. Last summer, temperatures were relatively moderate, and peak demand remained limited to 16,000 MW.

This summer, however, demand may exceed 18,000 MW.

To meet this demand: ? At least 2,000 MW must be imported through cross-border electricity trade. ? The country’s installed 7,000 MW of coal-fi red capacity must operate at full capacity. ? To fully operate 12,000 MW of gasbased power plants, about 2,400 MMCFD of gas supply is required.

However, due to shortages, Petrobangla cannot supply more than 1,200 MMCFD.

Therefore, to cover the defi cit, furnace oil-based plants must generate at least 3,000 MW.

Ensuring this requires clearing outstanding payments to private producers.

In addition, around $2 billion per month must be secured to fi nance energy and power imports. Challenges for the New Government The government led by BNP Chairman Tarique Rahman is set to begin its tenure facing multiple crises.

Among these, the power and energy sector stands out as one of the most critical challenges. Primary Energy Supply: Due to two decades of inaction and fl awed policies, there has been no effective initiative to explore, develop, and utilize domestic energy resources-particularly gas and coal.

As a result, more than 56% of the country’s energy and power needs are now import-dependent.

However, due to failures in building necessary infrastructure-especially for LNG and coal imports-the country cannot import enough to meet total demand.

In 2024 alone, the government spent $20.2 billion on energy imports and debt servicing in this sector.

Experts fear that this fi gure may rise to $24 billion this year.

Rapidly reducing import dependence is unlikely in the short term.

Therefore, the new government must ensure adequate foreign currency reserves to fi nance energy imports-a task that will not be easy. Gas Production Decline: The defi cit in primary gas supply exceeds 30% of demand.

To address this, the previous Awami League government launched a program to drill 50 and 100 wells.

The interim government did not cancel the program but revoked several drilling processes fi nalized under special laws, slowing progress.

So far, 25 wells have been drilled.

In 2023, 2024, and 2025, domestic gas supply declined by an average of 150 MMCFD per year. Current domestic supply stands at around 1,800 MMCFD.

Although 25 wells reportedly yielded 252 MMCFD of new gas, only 129 MMCFD has been added to the grid.

It is projected that once the full drilling program is completed by 2028, an additional 1,000 MMCFD may be added.

However, it appears unlikely that domestic supply can even be maintained at 1,800 MMCFD.

At the current pace, it is almost certain that the 2028 target will not be achieved.

Therefore, alongside domestic initiatives, attracting foreign investment in offshore and onshore gas exploration is essential. Upon assuming offi ce, the new government must fi nalize the draft Production Sharing Contract (PSC) and invite international tenders.

The interim government did not take any such initiative during its 18-month tenure. LNG Infrastructure Uncertainty: The previous government had fi nalized agreements to install a third FSRU and was close to concluding negotiations for another FSRU and two RLNG pipelines to increase LNG import capacity from 1,130 MMCFD to 2,400 MMCFD.

The interim government canceled these initiatives.

As a result, increasing LNG import capacity by 2028 has become uncertain. Without expansion, the gas defi cit will continue to widen.

Reviewing the canceled contracts could help accelerate supply growth.

Simultaneously, gas exploration must proceed with wartime urgency. Coal Policy Urgency: With domestic gas reserves declining rapidly, utilizing domestic coal has become increasingly urgent. Currently, limited coal is extracted from the Barapukuria coal mine, but it is insuffi cient to fully operate the 525 MW power plant there. Moreover, Barapukuria’s production is expected to cease within the next few years.

Therefore, the new government must take swift political decisions to develop new coal fi elds.

If domestic coal can supply the country’s 7,000 MW coal-fi red plants within three years, import dependence could be reduced signifi cantly. Until then, coal imports must be ensured to keep plants operating at full capacity. During the interim government period, this was not done adequately, and the coal plant load factor remained at 56%.

If it can be raised above 80% this year, it would help reduce power generation costs.

Expansion of Renewable Energy: With the addition of a wind power project to the grid, total grid-connected renewable energy capacity has reached nearly 800 MW. Last year, only 2% of the country’s total electricity generation came from renewable sources.

However, rooftop solar installations under the net metering policy are progressing. Due to the lack of effective initiatives by the interim government, this momentum has slowed. Furthermore, the interim government canceled Letters of Intent (LOIs) for 37 grid-scale solar projects that had been fi nalized during the Awami League government under special legislation.

These projects had a combined capacity exceeding 5,000 MW.

Although new tenders were later invited for a similar capacity with revised conditions, no foreign investors participated.

Entrepreneurs were found for only 900 MW.

Even for these projects, there is uncertainty about whether fi nancing will be secured under the new conditions.

In this situation, if the country aims to raise renewable energy capacity to 20% by 2030, the new government must announce a special action program. Dedicated initiatives for rooftop solar are necessary.

Additionally, ensuring land acquisition and grid evacuation facilities before inviting tenders for grid-scale solar projects could enable the country to procure solar power at lower prices than currently available.

This would help reduce dependence on highly expensive furnace oil-based power generation during daytime hours. Moving Toward a Subsidy-Free Energy Sector: In the FY 2024-25 national budget, subsidies allocated to the power and energy sector amounted to approximately BDT 70,000 crore. Of this, around BDT 8,000 crore was allocated for the LNG sector, with the remainder largely for the power sector.

Although the allocation has been reduced in the FY 2025-26 budget, it is widely believed that the actual subsidy requirement will ultimately increase. Currently, the average cost of electricity generation is BDT 12.10 per unit, while the Bangladesh Power Development Board (BPDB) sells it at BDT 7.04 per unit- resulting in a loss of over BDT 5 per unit.

The IMF has already set a condition requiring Bangladesh to make the power and energy sector fully subsidy-free by 2030.

As a result, the IMF has withheld the fi nal installment of its loan during the interim government period, stating that the funds will be released once an elected government assumes offi ce.

However, electricity and energy prices for both consumers and industries are already high.

Therefore, reducing subsidies through tariff adjustments alone is not feasible.

Instead, the supply cost of fuel and electricity generation must be reduced.

Experts suggest that production costs could be lowered signifi cantly if oilbased power generation is phased out completely.

This could be achieved through the expansion of renewable energy, maximizing coal-fi red generation, and increasing gas supply.

Settlement of Arrears and Foreign Exchange Requirements: Since 2022, during the Awami League government, arrears in the power and energy sector have been increasing. When the interim government took offi ce, total outstanding payments in the sector stood at approximately $3.1 billion.

These were gradually reduced to a manageable level. Currently, there are no arrears in the LNG and gas sectors.

However, outstanding payments in the power sector amount to around BDT 30,000 crore.

Alongside settling these arrears, the government must ensure approximately $2 billion per month to cover energy and power imports as well as debt servicing. Many analysts believe that to reduce expenditure, excessive and high-cost power plants should be quickly phased out.

At the same time, LNG imports must be increased so that all gas-based power plants can be brought into operation. Operationalization of the Rooppur Nuclear Power Plant: The Rooppur Nuclear Power Plant is one of the country’s largest infrastructure projects. With an investment of $12 billion and a capacity of 2,400 MW, the project’s commissioning has been delayed by two years due to the Russia-Ukraine war.

The interim government did not take effective steps to operationalize the project.

Although allegations of corruption were raised, both domestic and international sources reportedly rejected those claims.

The new government, while investigating any irregularities, must ensure that: ? The fi rst unit becomes operational by 2026. ? The second unit becomes operational by 2027. Given that nuclear energy is carbonfree, the government should also consider expanding the project with an additional unit.

In the long term, this would signifi cantly reduce overall electricity generation costs.

Reorganization of Institutional Structure and Management: During 17 years of governance, the Awami League government structured public sector boards, management, and staffi ng according to its preferences.

Although political considerations were often prioritized, companies continued to operate with technical competence.

However, many projects were also implemented based on political decisions.

After assuming offi ce, the interim government replaced the boards of all power and energy companies, claiming to free them from ministerial infl uence.

However, this created new complications. Many board chairpersons appointed were retired government offi cials with limited prior experience in the sector. Demands to include sector experts and business representatives were largely ignored.

Additionally, there were widespread changes at the executive and senior management levels.

Allegations have emerged that many appointments were infl uenced by affi liations with a particular political group.

If the BNP government does not undertake a comprehensive restructuring of governance and management at the board and executive levels, it may face obstacles in implementing its policy decisions. Conclusion For a country striving to move toward developed status, building an energy and power system that truly serves its people is not a luxury-it is a necessity.

At its core, the goal is simple: households and businesses must have reliable, high-quality, uninterrupted electricity and fuel at prices they can afford and compete with regionally. Yet reality is more complex. Despite pressure from development partners, a completely subsidy-free power and energy sector may not be realistic for Bangladesh at this stage. Over the past two decades, weak planning, slow progress in developing domestic energy resources, hesitation in expanding renewable energy, and limited focus on effi ciency and conservation have steadily increased costs and deepened import dependence. Governance weaknesses have compounded the problem.

Allegations of corruption and ineffi ciency have eroded public trust.

The new government faces the diffi cult task of investigating these concerns, holding those responsible accountable, and restoring credibility to the sector. Fostering genuine competition will be key to curbing corruption and improving performance.

In January, the interim government’s power sector review committee pointed to irregularities in several projects, including the Adani power purchase agreement, and claimed to have identifi ed instances of corruption.

However, many stakeholders believe the incoming administration should independently reassess the fi ndings before taking major action.

Beyond repealing certain special laws and returning tariff-setting authority to BERC, the interim government introduced few substantive reforms.

Repeated contract cancellations and suspended negotiations also unsettled investors.

Rebuilding investor confi dence will therefore be one of the new government’s toughest challenges. Delivering on the BNP’s manifesto promises will require restoring stability, predictability, and trust.

Above all, the pledge to create 15 million jobs within 18 months hinges on industrial expansion and business growth.

That ambition cannot be realized without secure, uninterrupted, and competitively priced energy-because without power, there can be no progress.

The Centre for Science and Environment (CSE) on 30 January honored 433 schools from across India as the country’s ‘greenest’ institutions at the Green School Awards 2025-26, recognizing their commitment to sustainable campus practices and environmental learning.

The awards are conferred annually under CSE’s Green Schools Program (GSP), a 21-year-old environmental education initiative that enables students to conduct a rigorous, on-campus environmental audit of their own schools, to measure the effi cacy of resource management and green practices in the school.

The Bangladesh Independent Power Producers Association (BIPPA) has sounded a warning over the country’s power supply situation.

As the new government begins its tenure, the private power sector is voicing serious concerns about fi nancial imbalances and alleged contractual violations.

Industry leaders fear widespread load-shedding during the upcoming Ramadan and irrigation seasons, particularly as Bangladesh heads toward a hot and humid summer.

The independent power sector is facing a severe fi nancial crunch. Large outstanding payments from the government have left Independent Power Producers (IPPs) struggling to import liquid fuel and service bank loans.

According to BIPPA, these companies cannot continue operations unless at least 60% of their overdue payments are released immediately.

The Bangladesh Power Development Board (BPDB) itself is under mounting pressure, having failed to make payments on time in accordance with Power Purchase Agreements (PPAs). Power plants operating on heavy furnace oil (HSFO) reportedly have not received payments for eight to ten months, with total arrears reaching approximately BDT 14,000 crore. Despite these delays, BPDB has imposed ‘Liquidated Damages’ (LD) penalties on several local IPPs for outages that occurred between July 2022 and December 2024.

BIPPA alleges that these penalties represent an unfair attempt to shift responsibility for systemic failures onto private producers.

It argues that outages linked to fuel shortages and delayed payments cannot reasonably be attributed solely to plant operators.

The association has also raised concerns about what it describes as discriminatory treatment between foreign investors and domestic power producers. For example, foreign suppliers such as Adani Power have reportedly curtailed supply due to unpaid bills without facing similar LD penalties.

In contrast, local producers have continued operating under severe fi nancial strain in what they describe as a commitment to national interest.

Industry stakeholders contend that this creates a troubling double standard. While foreign producers appear insulated from aggressive penalty measures, local investors face fi nancial deductions even as they struggle to maintain operations.

BIPPA argues that such practices undermine investor confi dence and weaken the long-term stability of the power sector.

The matter has been brought before the Bangladesh Energy Regulatory Commission (BERC), where a review petition is currently pending and under consideration.

BIPPA maintains that continuing to deduct LD penalties while the review process is ongoing contradicts principles of equity, contractual fairness, and regulatory stability. Meanwhile, technical pressures on the national grid are intensifying. Peak electricity demand this summer is expected to exceed 18,000 megawatts (MW), with forecasts predicting stronger and more frequent heatwaves than in 2025.

To manage this demand, the system will require an estimated 3,000 to 3,500 MW from liquid fuel-based power plants during peak hours.

However, gas supplies continue to decline, and foreign exchange constraints are limiting the government’s ability to import coal and LNG.

Even if maximum gas volumes are allocated to the power sector, gasbased generation is unlikely to exceed 10,000 MW. Under these conditions, liquid fuel-based plants play a critical role in meeting peak demand.

If IPPs are unable to operate due to cash shortages, the country could face signifi cant supply defi cits. Without adequate fuel procurement and timely payments, many plants may be forced to scale back generation.

In that scenario, widespread load-shedding would become diffi cult to avoid. While the new government may require time to fully assess and address these structural challenges, BIPPA argues that the current approach is unsustainable.

The association warns that failure to resolve payment disputes and restore fi nancial discipline could destabilize the entire power system. With Ramadan and the irrigation season already underway and summer demand rising rapidly, the stakes are high.

Ensuring timely settlement of arrears, maintaining contractual fairness, and securing fuel supplies will be critical to preventing disruptions.

The private power sector maintains that it remains committed to supporting national energy security.

However, without immediate corrective measures, industry leaders caution that operational capacity will erode further.

According to BIPPA, safeguarding grid stability now depends not only on technical readiness but also on restoring fi nancial balance and regulatory consistency across the sector.

As part of the interim government’s efforts to reduce project expenses, the construction of Eastern Refi nery Limited’s second unit (ERL-2) has been cut by Tk4,465 crore, even before work has begun.

A revised proposal puts the project’s new cost at Tk31,000 crore, down from Tk35,465 crore, and has been submitted to the Planning Commission. On 23 December, the Executive Committee of the National Economic Council (Ecnec) approved the project conditionally, asking for a review of various components, senior planning commission offi cials said.

They said Ecnec had asked to revise detailed engineering, design, construction supervision, commissioning, and associated buildings and infrastructure – to ensure costs were reasonable. Following the directives, a cost review committee was formed under Amin Ul Ahsan, chairman of Bangladesh Petroleum Corporation (BPC), with offi cials from ERL and the energy division.