Current Challenges and Road Ahead for the Power and Energy Sector

Bangladesh's power and energy sector is facing significant structural and financial pressures following recent policy shifts, mounting outstanding dues, and slow progress in renewable energy investments. Industry experts attribute the current supply challenges to policy revisions, delayed payments, and lower investor engagement.

Following the repeal of the Speedy Supply of Power and Energy (Special Provisions) Act, 37 pipeline renewable energy projects—representing a combined capacity of 3,287 MW—were cancelled. Subsequently, fresh tenders were floated for 5,538 MW across 55 solar power projects; however, due to the absence of sovereign guarantees, proposals were received for only 900 MW, reflecting reduced investor participation.

Additionally, accumulated unpaid bills have created severe financial strain. According to data from the Bangladesh Power Development Board (BPDB), total dues to power and energy suppliers have reached approximately BDT 45,000 crore, with BDT 14,000 crore owed to private oil-based power plants alone. Delayed settlements for coal and gas imports have forced several major power generation facilities to reduce operations or temporarily shut down.

In response to the situation, Power and Energy Minister Iqbal Hasan Mahmud Tuku indicated that the government is considering the reinstatement of Letters of Intent (LOI) for 31 previously cancelled renewable energy projects. This initiative aims to restore investor confidence and stabilize the energy ecosystem to ensure long-term power supply security.