Bangladesh’s Power Division has reported accumulated losses and arrears of Tk760 billion (bn), with the Power Minister warning that electricity is now being supplied under a heavy debt burden.
Speaking at a handover ceremony of the Executive Committee of the Forum for Energy Reporters Bangladesh (FERB) at the Secretariat in Dhaka, Power, Energy and Mineral Resources Minister Iqbal Hasan Mahmud said the country had inherited mounting liabilities despite maintaining electricity supply.
Earlier, the minister held a meeting with Economic Adviser Rashed Al Mahmud Titumir over the sector’s outstanding dues. Of the total Tk760bn shortfall, Tk460bn is owed by the Bangladesh Power Development Board (BPDB) to various companies, while the remaining Tk300bn represents accumulated losses of state-owned firms. Officials warned that uninterrupted supply would be difficult without settling the arrears.
The minister criticised previous expansion of generation capacity without securing energy supply, forcing the government to pay capacity charges to idle private plants.
System losses, he said, have risen from 6% during his previous tenure to 10%, adding significant financial strain. The government aims to reduce losses to 3%, initially targeting 5%, and is considering renegotiations with private power producers to ease pressure amid concerns over potential scrutiny from the International Monetary Fund.
He also noted that private sector participation in power generation has risen to 82%, far above the 35% ceiling set in a 2004 policy, limiting state control and complicating efforts to manage liabilities without raising tariffs.
Addressing gas shortages, the minister said underinvestment in domestic exploration — rather than mismanagement — lay behind the crisis, and pledged renewed focus on local drilling to reduce reliance on imports.
The minister, however, said that the government is considering negotiations with private power producers to protect the interests of both sides, while acknowledging the risk of pressure from international lenders, including the International Monetary Fund, if losses continue to mount.
Describing the current state of the energy sector as “highly disorderly”, he said it would take time to restore discipline and financial stability. He criticised the previous administration for maintaining electricity supply at the cost of accumulating substantial public debt.
“Some may say there were blackouts before and now the lights are on. But behind this electricity, a mountain of debt has been left on the public shoulders,” he said, arguing that enduring hardship would be preferable to burdening the nation with unsustainable borrowing.
Addressing allegations of corruption against him, the minister said multiple inquiries had found no evidence of wrongdoing and claimed he had been subjected to a “character assassination” through inaccurate reporting, which had affected his family.
Despite the sector’s mounting liabilities, he reiterated that the government does not want to increase tariffs and is seeking to build a framework that shields the state from debt risks while ensuring ordinary consumers benefit. He added that reforms aimed at improving transparency and accountability across the energy sector would continue.
The event was presided over by outgoing FERB chairman Md Shamim Jahangir, while newly elected chairman M Azizur Rahman also spoke, among others. Members of both the outgoing and newly elected committees were presented with commemorative crests. The programme was conducted by FERB Executive Director Serajul Islam Siraj.