With the National Election scheduled for February 12, 2026, Bangladesh has formally entered election mode. Political activity is set to intensify, public debate will sharpen, and expectations from the next government are already taking shape.
amid this transition, attention is increasingly turning to what the interim government leaves behind, particularly in sectors critical to economic stability and long-term growth.
the interim administration, led by Dr. Muhammad Yunus and in power since August 2024, was entrusted with more than day-to-day governance.
as a nonpolitical and ostensibly neutral authority, it was widely expected to address deeprooted governance failures and initiate structural reforms in key backbone sectors of the economy.
the energy and power sector, long plagued by inefficiency, corruption, and policy inconsistency, ranked high on that reform agenda. Sixteen months on, however, a neutral assessment suggests that expectations have only been partially met. While a few corrective steps were taken, the overall approach remained largely ‘business as usual,’ leaving Bangladesh’s energy security fragile at a time when resilience and reform were most needed.
electricity generation costs and system losses increased, the primary fuel supply crisis deepened, and despite substantial subsidies, the financial condition of stateowned enterprises-BPDB, Petrobangla, and BPC-did not improve.
the government did make a promising start by canceling the non-transparent Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act and restoring the sole authority of the Bangladesh Energy Regulatory Commission (BERC) to determine fuel and electricity prices. However, it failed to take action against those responsible for massive irregularities and corruption. No meaningful steps were taken to exploit discovered coal resources or to expedite onshore and offshore petroleum exploration.
the government hesitated in adopting a clear strategy for utilizing Bhola gas resources and failed to significantly increase the contribution of clean energy.
although changes were made in senior positions of state-owned enterprises, bureaucrats continued to dominate the energy and power sector, much like under previous governments. The sector could have benefited from better planning and implementation had experienced professionals with institutional memory been given responsibility.
as a result, a power system with huge surplus capacity continues to suffer from fuel shortages and mounting capacity payment obligations.
the government achieved limited success in streamlining outstanding payment obligations, providing temporary relief to BPDB and Petrobangla from large arrears owed to power and fuel suppliers. However, this improvement proved short-lived, and the situation soon reverted to its previous state.
the interim government is now set to leave behind an insecure and fragile energy and power sector for the incoming administration.
actions Taken and Impacts The interim government’s decision to cancel the controversial and non-transparent *Speedy Power Supply Special Act 2010* and to restore the sole authority of BERC in fuel and power price determination was widely welcomed.
the appointment of competent officials in institutions such as BERC, SREDA, and BEPRC generated some positive momentum.
there was also an expectation that the interim government would objectively review the structure of BPDB, power generation companies, Petrobangla and its subsidiaries, BPI, BPMI, HCU, GSB, BMD, and other state-owned energy and power entities, freeing them from excessive bureaucratic control.
that expectation largely went unmet.
interim Government Will Leave Behind a Very Insecure Energy Sector When the new government takes office next year, it will inherit a highly insecure and uncertain energy and power sector.
among its key failures, the interim government did not adequately identify, or deliberately avoided identifying, irregularities and corruption within the sector.
a white paper prepared by a government-appointed committee correctly identified the power and energy sector as the most corruptionprone.
the report stated that corruption had doubled the cost of power generation.
under the previous regime, excessive generation capacity was established without ensuring adequate fuel supply, largely benefiting favored syndicates through capacity payment provisions. Many of these contracts were awarded without formal tendering, and the necessary transmission infrastructure was not developed to evacuate the power generated.
as a result, BPDB has had to pay exorbitant amounts to power suppliers, covering both energy charges and capacity payments. Some contracts allegedly favored specific contractors.
the interim government failed to act on the white paper’s recommendations to investigate these irregularities and hold those responsible accountable.
instead, the energy adviser publicly admitted that ‘politicians, bureaucrats, and businesses do not want to get rid of irregularities and corruption.’ Another major shortcoming was the failure to expedite and complete the remaining works of the otherwise wellperforming Rooppur Nuclear Power Project. Delays could have been avoided had experienced project management not been replaced at a critical stage. Credit must be given to the government for appointing capable officials at BERC. Under improved leadership, the regulator has performed better over the past year and has begun holding its licensees more accountable.
as noted earlier, the interim government was expected to take pragmatic decisions on exploring and exploiting domestic fuel resources.
it could have reassessed coal mining options and prepared the groundwork for an elected government to take informed decisions.
instead, it did virtually nothing. Given the current policy environment, domestic coal exploitation now appears unlikely in the near future.
the government also failed to finalize updated Model Production Sharing Contracts (MPSCs) for new bidding rounds to engage international oil companies in onshore and offshore exploration. Drafts prepared by Petrobangla reportedly remain stuck at the Energy Ministry. Approval of MPSCs could have enabled fresh tenders in early 2026, a prospect that now seems remote.
the interim government deserves some credit for restructuring BAPEX’s board and supporting its operational activities, which helped complete workover and rehabilitation of several gas wells. However, these efforts resulted in only marginal increases in domestic gas production.
at the same time, the government remained indecisive on utilizing the stranded gas resources of the Bhola gas field.
at a time of acute energy poverty, Bhola gas could have provided meaningful relief to the gasstarved national grid and reduced reliance on expensive imported LNG. LNG or CNG options for Bhola gas are not viable; connecting the fields to the national grid via Barishal to Khulna remains the most practical solution.
a regional transmission pipeline would also encourage foreign investment in exploration and stimulate industrial development in the Khulna and Barishal regions. Without professionally reviewing the necessity of key contracts signed under the previous regime, the government canceled all agreements made under the speedy power supply act.
one such casualty was the third FSRU project. Had it proceeded, Bangladesh could have added around 500 MMCFD of RLNG supply capacity by 2029.
the government neither floated a new FSRU contract nor expedited the land-based LNG terminal project of Petrobangla.
as a result, chronic gas shortages will remain the Achilles’ heel of the incoming government.
the Chief Adviser’s ‘three-zero’ vision gained little traction in energy transmission, and progress in renewable energy remained limited. Bangladesh does not have unlimited renewable potential, and the interim government did little to overcome bureaucratic hurdles slowing clean energy development.
to its credit, the energy adviser acknowledged these challenges.
the hope now is that the government leaves behind at least a realistic roadmap for energy transition. Conclusion It is understood that the interim government did not possess a magic solution to resolve Bangladesh’s deep-rooted energy crisis within a year. However, as a non-political authority, it had a unique opportunity to initiate essential structural reforms- improving governance, strengthening domestic resource exploration, optimizing fuel utilization, reducing losses, and enhancing efficiency.
the interim government could have restructured governance processes and finalized a comprehensive power and energy system master plan. While it avoided entering into new controversial agreements, its overall performance fell short of expectations.
it is now up to the incoming government to give the energy and power sector the priority it deserves, recognizing it as a strategic pillar of national economic development