Category: Energy and Power

Th e operational landscape of the Independent Power Producers (IPPs) in Bangladesh is currently de?ned by a paradoxical relationship between contractual obligations and ?nancial viability.

as an almost 50 percent contributor to the nation’s energy security, IPPs, particularly those operating Heavy Fuel Oil (HFO) based plants, have maintained a commitment to the national grid despite a growing liquidity crisis. Central to this crisis is the Bangladesh Power Development Board’s (BPDB) signi?cant delay in settling outstanding invoices. Reportedly, the arrears have now reached approximately Tk 14,000 crore for HFO-based producers. These payment delays often stretch between eight to ten months.

the long wait has forced many producers into ?nancial insolvency.

as a result, the affected IPPs cannot open Letters of Credit (LC) to import fuel. Subsequently, those IPPs also cannot maintain the ‘Availability Factor’, required as per respective Power Purchase Agreements (PPAs).

the root of the legal dispute lies in the imposition of Liquidated Damages (LD) by the BPDB during periods of forced outages.

the PPA provides a mechanism for the BPDB to penalize producers for the non-availability of electricity due to LD outages. Whereas, the IPPs argue and contend that these outages are a direct consequence of the BPDB’s own material breach of contract- speci?cally, the failure to make timely payments. From a legal point of view, this brings Section 13.2(j) of the standard PPA into sharp attention.

this clause entails that if the BPDB fails to settle undisputed invoices within a speci?c grace period, the producer’s contractual obligation to deliver dependable capacity (power) is effectively suspended. Such a period of suspension necessitated by the buyer’s (i.e., BPDB) default, the law advocates that the producer should remain entitled to Capacity Payments without being penalized by LD deductions.

the situation might even be complicated by looking at the role of the National Load Dispatch Center (NLDC).

iPPs are worried about how the BPDB issues instructions to NLDC. When the plantsare already struggling to buy HFO due to not being paid, the BPDB may issue dispatch instructions anyway. Industry experts note this as ‘imaginary demand’.

the goal of these orders could be triggering Liquidated Damages (LD) penalties against the IPPs, and it would be unfair if it were true.

this seems to be using the IPPs’ ?nancial struggles to arti?cially lower the debts. Such actions lead against the ‘Take-or-Pay’ model and make it much harder for the bankability of power projects to stay ?nancially viable.

the legal instance followed in the case of the Barisal Electric Power Company Limited (BEPCL) offers a noteworthy roadmap for resolution. In this precedent, the BPDB ultimately recognized that deductions (Tk 270.7 crore for outages) made during a period (between May and October 2023) of payment default were inconsistent with the protections afforded under Section 13.2(j).

this ultimately led to a reversal decision (by BPDB) of signi?cant LD penalties of BEPCL. But the LD decisions are applied differently to local vs foreign power producers, which may create market instability and threaten future investment.

it emphasizes the necessity for a harmonized legal interpretation for all IPPs that treats payment default as a ‘force majeure-like’ event. To safeguard a sustainable Bangladesh power sector, the Government should ensure that the PPAs are followed strictly and fairly.

the BPDB must cease the ongoing LD impositions for outages caused by its own lack of payment, linked to documented arrears. There should be an independent veri?cation mechanism to ensure that dispatch demands are based on genuine systemic requirements. There should also be a transparent, non-discriminatory approach for both local and foreign power producers to keep the investment climate stable and prevent capital ?ight. Protecting the legal rights (Section 13.2(j), etc.) of IPPs is essential to preserve the integrity of the energy market and for the future of the energy sector. Clearer communication and timely payments will ensure that the national grid remains reliable for everyone

Reliance Industries has signed a 15year green ammonia supply agreement with Samsung CandT Corp., marking one of the largest long-term offtake deals globally. Reliance Industries, India’s largest private-sector company, has entered into a binding long-term supply and purchase agreement (SPA) with Samsung CandT Corp.

of South Korea for the supply of green ammonia over a 15year period starting in the second half of ?scal 2029.

the agreement, valued at more than $3 billion, is among the largest long-term green ammonia offtake deals globally. It supports the development of exportoriented green fuel supply chains aligned with India’s National Green Hydrogen Mission. Reliance Industries is developing an integrated new energy platform spanning renewable generation, energy storage, green hydrogen, and downstream fuels and chemicals. The platform includes in-house manufacturing of solar modules, battery energy storage systems (BESS), and electrolyzer systems.

Information and Broadcasting Minister Zahir Uddin Swapan has emphasized the need to develop a comprehensive industrial master plan for Bangladesh’s southern region by utilizing the vast natural gas reserves discovered in Bhola. Speaking at an iftar and prayer event organized by the Barishal Division Journalists Association at the Dhaka Reporters Unity recently, he stressed the importance of strategic planning to ensure proper use of this resource. ‘This valuable resource should be used effectively to expand industrialization in the region, and skilled and thoughtful individuals must come forward with ideas,’ the minister said. He noted that the signi?cant gas reserves in Bhola could serve as the foundation for a coordinated, industry-based development plan across the southern region. Encouraging journalists, he said they could contribute by compiling data and preparing a conceptual development proposal to help guide policymakers.

Bangladesh stands at a critical crossroads in its energy journey.

the ongoing global crisis has not created new vulnerabilities-it has simply exposed long-standing weaknesses that have been ignored for too long. Heavy dependence on imported fuel, slow progress in domestic exploration, and bureaucratic delays have left the country dangerously exposed to external shocks.

the government’s renewed focus on attracting foreign investment in oil and gas exploration is a step in the right direction.

updating Production Sharing Contracts and prioritizing bidding rounds signal intent. But intent alone is not enough.

the real test lies in execution- something Bangladesh has historically struggled with in the energy sector.

one of the most pressing concerns is time.

traditional bidding processes that take two years or more are no longer viable in a fast-changing global energy market. By the time contracts are signed, economic conditions often shift, making projects less attractive or even unfeasible. Faster, more ?exible approaches-such as negotiated deals or streamlined international bidding-must be seriously considered.

equally important is the need to rethink policy rigidity. Keeping promising exploration blocks reserved while seeking foreign investment sends mixed signals to investors. A more pragmatic approach-allowing joint ventures with national entities like BAPEX-could unlock both capital and technical expertise.

ultimately, Bangladesh must recognize that energy security is not just an economic issue-it is a national priority. Without decisive action to boost domestic exploration and reduce import dependence, the country risks deeper economic instability in the years ahead.

Commerce Minister Khandaker Abdul Muktadir recently said the government will strengthen monitoring of the lique?ed petroleum gas (LPG) market through local administrations to ensure that consumers do not face harassment and that no one engages in market abuse at the retail level. Quoting media reports, he said there have been concerns about a possible supply gap in the LPG market, which indicates that the government?xed price of a 12kg LPG cylinder, set at Tk 1,356, was being exceeded in some retail outlets.

the minister made the remarks while speaking to journalists after a meeting with representatives of LPG importers and suppliers in the conference room of the commerce ministry at the Secretariat.

the meeting discussed the prevailing situation regarding the market price and supply of LPG, according to a commerce ministry press release.

China has told its largest oil re?ners to suspend exports of diesel and gasoline, citing unidenti?ed sources, as the war in the Middle East risks an energy supply crunch. China is a net importer of oil and is one of several major Asian economies that depend on the vital Strait of Hormuz for energy.

traf?c through the strait is currently blocked.

the Middle East was the source of 57 percent of China’s direct seaborne crude imports in 2025, according to analytics ?rm Kpler.

of?cials from China’s top economic planner, the National Development and Reform Commission, met re?nery representatives ‘and verbally called for a temporary suspension of re?ned product shipments that would begin immediately’. ‘The re?ners were asked to stop signing new contracts and to negotiate the cancellation of alreadyagreed shipments,’ it said.

The OPEC Fund for International Development (The OPEC Fund) committed a record US$3.2 billion to development operations in 2025, the highest annual volume in the institution’s history, and a 39 percent increase year-on-year. Delivered through 76 operations worldwide, the results re?ect strong delivery amid elevated demand for development ?nancing as the OPEC Fund enters its 50th anniversary in 2026. The record performance underscored the OPEC Fund’s expanding role in supporting partner countries to strengthen economic resilience, close critical infrastructure gaps, enhance food security, facilitate energy access and address climate-related challenges.

in 2025, the OPEC Fund signed 35 public-sector operations, 26 privatesector operations and 15 grants across its ?nancing windows.

B a n g l a d e s h Shadharon Nagorik Shamaj, a civil society platform, recently urged all stakeholders not to create any arti?cial fuel shortage in the country taking advantage of the ongoing situation in the Middle East.

in a statement, the organization’s convener Mohiuddin Ahmed called on people not to spread panic among the public over the uncertainty surrounding global fuel supply triggered by the con?ict in the Middle East.

the platform said a dishonest group of traders might attempt to create an arti?cial crisis in the domestic market by using the international situation as an excuse.

at the same time, it warned that instability in the fuel supply management could also arise due to some wrong and unplanned decisions by the Bangladesh Petroleum Corporation and Petrobangla.

Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood on March 4 said that the government took some preparations to deal with possible temporary electricity and fuel crises amid global instability. ‘Due to the ongoing unrest in the Middle East, there is a concern for temporary crisis in the country’s energy sector,’ he said while addressing an emergency review meeting to deal with the emerging situation.

the minister chaired the meeting seeking cooperation of the common people to use electricity and fuel economical. The meeting also requested electricity users to avoid unnecessary illuminations at shopping malls, community centers and other places specially lighting and excessive usage of fuel. The government instructed traders not to sell diesel and petrol in the open markets, as law enforcement agencies will monitor the matter, according to the meeting of?cial.

The government has been implementing a series of measures to reduce system losses and maintain stable electricity tariffs. ‘If we are able to reduce system losses in the electricity, then we will be able to keep power tariff stable,’ Power, Energy and Mineral Resources minister Iqbal Hassan Mahmood said recently.

addressing an installation ceremony of Forum for Energy Reporters Bangladesh executive committee at the power and energy ministry’s conference room, Mahmood said that with transmission and distribution losses estimated around 10 percent, the power sector faces Taka 50 lakh for one percent system loss. Replying to a question the minister said the government is going to take aggressive plan for ensuring availability of gas in the country, as no gas well was dug during the last 15 years