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.