The interim government is preparing a three-year roadmap (FY26-FY28) to reduce the gap between electricity generation costs and selling prices, aiming for a fiscally sustainable level.
The plan includes tariff adjustments and protective measures for vulnerable populations. The issue was discussed in a virtual coordination meeting ahead of the International Monetary Fund’s (IMF) review next month.
Dr. Ziaul Abedin, Additional Secretary of the Finance Division, chaired the meeting, which was part of discussions under the IMF’s Extended Credit Facility (ECF) and Resilience and Sustainability Facility (RSF).
Gradual Removal of Power Subsidies
According to the Power Division, the government aims to eliminate power subsidies within two years without immediate tariff adjustments. However, tariffs may increase in FY26, depending on generation costs.
“We plan to introduce area-based power tariffs. For instance, residents of Gulshan, Banani, and Dhanmondi will pay higher rates,” said an official from the Power Division, speaking anonymously.
The government has already sought an IMF consultant to assist with the roadmap’s implementation. An official confirmed that nine strategic measures have been introduced to cut costs by 10%, making power tariffs more sustainable. “We plan to include these measures in the roadmap, despite the IMF’s reservations,” he added.
Cost-Saving Measures Expected to Ease Burden
The nine cost-cutting strategies include reviewing the coal pricing formula of Adani Power, which is expected to save Tk 11,444 crore in FY24-25.
Muhammad Fauzul Kabir Khan, Power and Energy Adviser, reaffirmed the government’s commitment to reducing the subsidy burden through internal management and sectoral reforms.
“It is possible to save Tk 11,444 crore through cost-cutting measures initiated by the Ministry of Power, Energy, and Mineral Resources,” he stated, emphasizing that these savings would ultimately benefit the public.
Meanwhile, Power Secretary Farzana Montaz clarified that the government has no immediate plans to increase power tariffs.
Prof. M. Tamim, Vice-Chancellor of Independent University Bangladesh (IUB), welcomed the interim government’s cost-cutting initiatives. “We appreciate the focus on internal reforms, which will help stabilize power tariffs,” he said.
