Bangladesh’s power and energy sector is caught in a vicious cycle of high-cost generation, heavy import dependence, rising subsidies and entrenched governance failures, prompting energy experts, economists and political leaders to call for an urgent national consensus to steer the sector toward a sustainable transition.
Speakers at a major policy dialogue in the capital on Tuesday warned that without cross-party agreement and continuity in core energy policies—regardless of which government is in power—the sector’s deepening financial crisis could jeopardise industrial growth, macroeconomic stability and energy security in the coming years.
The observations were made at a discussion titled “Sustainable Pathways for Next Government to Overcome Power and Energy Crisis,” held at the CIRDAP auditorium in Dhaka, organised by English online news portal Just Energy News.
The session was moderated by Just Energy News Editor Md Shamim Jahangir.
Despite having significant excess generation capacity, the sector continues to incur soaring costs due to expensive imported fuels, capacity charges for idle plants, dollar shortages and weak regulatory oversight.
Analysts said these structural flaws cannot be fixed through ad hoc measures or short political cycles, but require a long-term, nationally agreed roadmap anchored in transparency, accountability and realistic demand planning.
Call for continuity beyond political change
Participants repeatedly stressed that frequent policy reversals with changes of government have worsened the crisis. They argued that energy security, like education or health, must be treated as a national priority insulated from partisan politics.
Future governments must move away from ‘business as usual’ and agree on a minimum national framework for the power and energy sector, several speakers said, noting that without such consensus, reforms would remain fragile and reversible.
Primary energy neglect at the root
Speaking as chief guest, Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed said the country’s energy crisis stems primarily from decades of neglect of primary energy development.
“Bangladesh invested heavily in power generation capacity but failed to invest adequately in primary energy—gas, coal and renewables,” he said. “Without strengthening primary energy, sustainable electricity supply is simply not possible.”
He highlighted major constraints in LNG imports, noting that the two existing Floating Storage and Regasification Units (FSRUs) are already operating at near maximum capacity. “In emergency situations, LNG imports cannot be increased beyond these limits, a reality that is often ignored in planning,” he said.
Jalal Ahmed also noted that no realistic reservoir management study has been conducted since 2001, while gas exploration has remained stagnant for around 16 years. He pointed out that a large portion of existing power generation capacity is unnecessary when measured against actual demand, yet consumers continue to bear the financial burden through higher tariffs and subsidies.
Data-driven planning, end to inflated forecasts
Keynote speaker Dr Ijaz Hossain, former professor of Bangladesh University of Engineering and Technology (BUET), said exaggerated demand projections in the past led to overcapacity and costly contracts.
“Today, 97 to 98 percent of our total energy supply is fossil fuel–based, while around 60 percent of power and energy is import-dependent,” he said. “This import dependence has increased further over the last year, creating immense pressure on foreign exchange reserves.”
He warned that inefficiencies and irregularities in the gas sector have taken on a more serious dimension since the shift to imported LNG. According to his analysis, nearly 10 percent of gas supplied is effectively lost due to theft and mismanagement. “When 30 to 33 percent of total gas supply comes from imported LNG, such losses mean billions of dollars in direct foreign exchange wastage every year,” he said, adding that stopping this leakage could significantly ease the dollar crisis.
Politics, policy and the price of power
BNP Standing Committee member Iqbal Hasan Mahmud Tuku said electricity policy must strike a careful balance between commercial viability and public service obligations, something that requires time, stability and deep political commitment.
“For years, the country was run under the belief that development alone was enough,” he said. “Today, the hidden costs of that approach are being paid by ordinary people through higher electricity bills and mounting public debt.”
Tuku recalled that earlier policy frameworks aimed to keep 65 percent of power generation under government control, with the rest developed through public-private partnerships, allowing the state to retain leverage over prices. He alleged that abandoning this approach, along with bypassing public procurement rules through one-to-one negotiations, had fuelled corruption and rent-seeking.
He also criticised capacity payments for idle plants and warned that continued foreign currency outflows for power projects, including those not yet operational, have intensified pressure on the economy. “No government alone can fix this. A national consensus is the only way forward,” he said.
Speaking at the dialogue, Bangladesh Jamaat-e-Islami Assistant Secretary General Ahsanul Mahboob Zubair said his party would work to build a national consensus to ensure power and energy as a right of citizens.
He also stressed the need for national unity to resolve the crisis in the country’s power and energy sectors.
Expressing disappointment over corruption in these sectors, he said that large industrial units steal natural gas.
Financial risks and macroeconomic threat
Economist Prof Mushtaq Hossain Khan of SOAS, University of London, painted a stark picture of the sector’s financial impact. He said the power sector required around $5 billion in subsidies last year, much of it paid in foreign currency.
“These losses cannot be financed indefinitely through borrowing or printing money,” he warned. “That path leads directly to inflationary and macroeconomic instability.”
He argued that the core problem is not the absence of policy documents, but institutionalised corruption since 2010. “Power generation increased fourfold, but costs rose elevenfold, while capacity charges increased twentyfold. Unless corruption is tackled head-on, no reform will work,” he said.
Renewables, diversification and tough decisions
Several speakers, including Bangladesh Energy and Power Research Council (BEPRC) member Dr Md Rafiqul Islam and energy expert Prof M Tamim of Independent University, Bangladesh (IUB), stressed the need to diversify energy sources and gradually shift toward renewables.
Prof Tamim said domestic gas remains the cheapest source of electricity and that power produced without indigenous fuel cannot be supplied below Tk 10 per unit. He warned that over-reliance on imports has eroded opportunities to develop local resources.
At the same time, he cautioned against abrupt cancellation of power contracts without proper review, as this could disrupt supply and harm consumers. “Hard, politically sensitive decisions are unavoidable, but they must be taken carefully and transparently,” he said.
Governance, transparency and accountability
Former justice Moinul Islam Chowdhury said non-competitive and risk-heavy power purchase agreements have saddled the Bangladesh Power Development Board with disproportionate liabilities. He cited estimates suggesting annual losses in the power sector now exceed Tk 50,000–55,000 crore.
Consumer rights advocate Prof M Shamsul Alam criticised regulatory failures, alleging that oversight bodies have been unable to curb irregularities. He stressed that without restoring accountability, even well-designed policies would fail in practice.
Consensus as the cornerstone
Political leaders from different parties echoed the call for unity on national issues. Jamaat-e-Islami leader Ahsanul Mahboob Jubair said frequent policy changes with every change of government have only deepened the crisis, arguing that energy, like education and health, must be governed by shared national commitments.
In his concluding remarks, BEPRC Chairman Mohammad Wahid Hossain said the next government would face immense challenges in the power and energy sector and urged the media and academia to help build public understanding. “Unpopular but necessary decisions become easier when people understand the truth,” he said.
The discussion ended with a clear message: without a broad-based national consensus that transcends political cycles, Bangladesh’s power and energy sector risks sliding deeper into crisis, undermining economic stability and the country’s long-term development goals.