Officials of the Bangladesh Power Development Board (BPDB) have informed a visiting International Monetary Fund (IMF) team that the upcoming elected government will be entitled to adjust the power tariff.
BPDB officials conveyed this during a meeting with the IMF delegation, which inquired about the implementation of the three-year roadmap to phase out power subsidies and achieve a zero-subsidy regime.
The BPDB team informed the IMF that the board expects to save over Tk 1,000 crore through internal reforms in the power sector. In addition, the government is reviewing existing Power Purchase Agreements (PPAs), which is expected to generate further savings and help reduce the overall subsidy burden.
The International Monetary Fund (IMF) held a meeting on Tuesday with senior officials from the Bangladesh Power Development Board (BPDB) and the Power Division to review six key issues, including internal and external payment arrears and updates on capacity charges. The meeting was part of the IMF’s fifth review under the Extended Credit Facility (ECF), Extended Fund Facility (EFF), and Resilience and Sustainability Facility (RSF) programmes.
A high-level IMF delegation, led by Chris Papageorgiou, is currently visiting Dhaka from October 29 to November 13, 2025, as part of its regular program monitoring and policy consultations.
According to officials familiar with the discussions, the meeting focused on the operational and financial performance of BPDB in FY2024–25 and the outlook for FY2025–26 and FY2026–27. It also reviewed the volume of government subsidies provided to the power sector in FY2025 and FY2026 to date, along with projections for FY2027.
Key agenda items included the status of external payment arrears, implementation of repayment plans, and sources of foreign exchange to settle outstanding dues. The IMF also sought updates on domestic payment arrears and the government’s plan to reduce them.
The delegation inquired about recent findings from the Power Purchase Agreement (PPA) Review Committee, particularly regarding capacity charges paid to private power producers. Progress of major power sector projects, along with the government’s roadmap to expand renewable energy capacity, was also discussed.
The meeting further examined ongoing power generation and supply challenges, their impact on industrial production, and implications for electricity subsidies. Broader energy sector reform initiatives, aligned with fiscal sustainability and IMF program objectives, were also part of the agenda.
Senior officials from the Power Division, BPDB, Bangladesh Energy Regulatory Commission (BERC), and the Finance Division joined the discussions.
The IMF team, however, met with Petrobangla officials on November 2, 2025, and inquired about measures to reduce energy subsidies. The officials informed the delegation that the government has allocated Tk 6,000 crore in subsidies for the current fiscal year. They added that the subsidy burden has already been reduced through tariff adjustments and internal reforms in the energy sector.
This engagement aims to provide the IMF team with an updated assessment of Bangladesh’s power and energy sector, particularly the financial health of BPDB and the government’s subsidy management strategy amid rising global energy costs.
Officials said the IMF delegation will hold a series of technical sessions throughout its two-week visit, engaging with the Finance Division and Bangladesh Bank, among others, to assess reform progress under the ECF, EFF, and RSF programs.