Power and energy sector is trapped in a vicious cycle of high-cost generation, heavy import dependence, rising subsidies, and persistent governance failures, prompting energy experts, economists, and political leaders to call for an urgent national consensus to guide the sector toward a sustainable transition.
Speakers at a policy dialogue in Dhaka 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 threaten industrial growth, macroeconomic stability, and long-term energy security.
The observations were made at a discussion titled “Sustainable Pathways for the Next Government to Overcome the Power and Energy Crisis,” held at the CIRDAP auditorium in Dhaka and organised by English online news portal Just Energy News in association with the Chevron Bangladesh and the Ken Accessories Industry Ltd. 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 payments for idle power plants, dollar shortages, and weak regulatory oversight.
Analysts said these structural problems cannot be addressed through ad hoc measures or short political cycles, but require a long-term, nationally agreed roadmap anchored in transparency, accountability, and realistic demand forecasting.
Call for Policy Continuity
Participants repeatedly stressed that frequent policy reversals following changes in government have aggravated the crisis. They argued that energy security — like education or healthcare — 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, warning that without such consensus, reforms would remain fragile and reversible.
Primary Energy Neglect at the Core
Speaking as chief guest, Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed said the crisis stems largely 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 constraints in liquefied natural gas (LNG) imports, noting that the country’s two Floating Storage and Regasification Units (FSRUs) are already operating near full capacity.
“In emergency situations, LNG imports cannot be increased beyond these limits, a reality often ignored in planning,” he said.
Jalal Ahmed also noted that no comprehensive reservoir management study has been conducted since 2001, while gas exploration activities have remained largely stagnant for around 16 years.
He said a substantial portion of existing power generation capacity is unnecessary when measured against actual demand, yet consumers continue to bear the cost through higher tariffs and subsidies.
Demand Forecasting and Import Dependence
Keynote speaker Dr Ijaz Hossain, former professor of Bangladesh University of Engineering and Technology (BUET), said inflated demand projections in the past led to overcapacity and costly long-term contracts.
“Today, 97 to 98% of our total energy supply is fossil fuel-based, while around 60% of power and energy is import-dependent,” he said, adding that import reliance has intensified over the past year, putting severe pressure on foreign exchange reserves.
He warned that inefficiencies and irregularities in the gas sector have become more severe since the shift to imported LNG. According to his analysis, nearly 10% of gas supplied is lost due to theft and mismanagement.
“When 30 to 33% of total gas supply comes from imported LNG, such losses translate into billions of dollars in direct foreign exchange wastage every year,” he said, noting that curbing leakage could significantly ease dollar shortages.
Politics, Policy, and Rising Costs
BNP Standing Committee member Iqbal Hasan Mahmud Tuku said electricity policy must balance commercial viability with public service obligations, a task that requires political stability and long-term commitment.
“For years, the country was run under the belief that development alone was sufficient,” 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% of power generation under government control, with the remainder developed through public-private partnerships, allowing the state to retain leverage over electricity pricing.
He alleged that abandoning this model, along with bypassing public procurement rules through one-to-one negotiations, fuelled corruption and rent-seeking.
The BNP leader also criticised capacity payments for idle power plants and warned that continued foreign currency outflows for power project, including those not yet operational, have intensified pressure on the economy.
“No single government can fix this alone. 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 access to power and energy as a fundamental right of citizens.
He stressed the need for national unity to resolve the crisis and expressed concern over corruption in the sector, alleging that large industrial units steal natural gas.
Financial Risks and Macroeconomic Threat
Economist Prof Mushtaq Hossain Khan of SOAS, University of London, outlined the sector’s mounting fiscal burden, saying 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 money creation,” he warned. “That path leads directly to inflation and macroeconomic instability.”
He argued that the core problem is not a lack 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), emphasised the need to diversify energy sources and gradually shift toward renewables.
Prof Tamim said domestic gas remains the cheapest source of electricity and warned that power generation without indigenous fuel cannot be delivered below Tk10 per unit.
He said excessive reliance on imports has undermined opportunities to develop local resources.
At the same time, he cautioned against abruptly cancelling power contracts without proper review, warning that such moves 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, citing estimates that annual losses in the power sector now exceed Tk50,000-55,000 crore.
Consumer rights advocate Prof M Shamsul Alam criticised regulatory failures, alleging 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 across party lines reiterated the need for unity on national priorities.
Jamaat-e-Islami leader Ahsanul Mahboob Zubair said frequent policy reversals following changes of government have only deepened the crisis, arguing that energy — like education and healthcare — 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 concluded 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 long-term development goals.