Bangladesh government mulls hand over electricity distribution to the private sector in a move aimed at improving service quality and reducing state liabilities, Power, Energy and Mineral Resources Minister Iqbal Hassan Mahmood said on Wednesday.
Speaking at a policy conclave on “Energy Security and Transition in Bangladesh” in the capital, the minister said the proposal has received in-principle approval from Prime Minister Tarique Rahman.
“We want to move the distribution system to the private sector. I urge investors to prepare,” he said, adding that private participation would enhance transparency and efficiency, while the government would retain control over power generation.
He cited examples from neighbouring countries where distribution is managed by multiple companies across cities, arguing that a similar model could improve service delivery in Bangladesh.
Supply strain and structural gaps
The minister acknowledged ongoing stress in gas and power supply, saying inadequate domestic exploration and heavy reliance on imports have created vulnerabilities.
He noted that disruption at a floating LNG terminal recently affected gas supply, leading to reduced pressure in several areas, including Mymensingh, and triggering public discontent.
Mahmood criticised past planning failures, saying despite building around 28,000MW of power generation capacity, corresponding fuel supply—particularly gas—was not ensured.
He pointed to projects such as gas-based power plants in Khulna that remain underutilised due to lack of pipeline connectivity, highlighting mismatches between infrastructure and resource planning.
Push for domestic gas, stronger LNG capacity
Emphasising long-term energy security, the minister said there is no alternative to increasing domestic gas exploration and production, while also strengthening LNG import infrastructure to avoid nationwide disruptions from single-point failures.
He said global uncertainties, including geopolitical tensions, have made energy procurement more complex and costly, putting pressure on the budget. The government is currently managing a significant backlog of energy-related payments, he added.
Renewable energy drive
Mahmood said the government has adopted a new renewable energy policy and is targeting up to 10,000MW of solar power generation, with interest already shown by foreign investors.
Plans include cluster-based solar projects and tax incentives for rooftop solar installations, including rebates and reduced holding taxes for users adopting renewable energy.
He added that competitive bidding processes for renewable projects would be launched by September.
Business concerns over energy crisis
Business leaders at the event expressed concern over persistent gas shortages, warning that unreliable energy supply is hampering industrial production and discouraging investment.
They said ensuring stable gas and electricity supply is critical for sustaining existing industries and attracting both local and foreign investment.