Over 99pc of energy allocation set for dev spending

More than 99 percent of the allocation for the energy and power sector in the proposed budget has been earmarked for development expenditure, according to budget documents presented on Saturday.

The sector accounts for about 1.85 percent of the Tk 17,345 crore total budget, with Tk 17,193 crore allocated to the energy and power divisions. Only Tk 152 crore, or 0.88 percent, has been set aside for operational costs.

Presenting the budget speech, Finance Minister Amir Khasru Mahmud Chowdhury said the government aims to shift away from heavy import dependence and inefficient infrastructure toward self-reliance, alongside expanding renewable energy and ensuring fiscal discipline.

He said efforts are underway to raise electricity generation capacity to 35,000 MW by 2030 and expand transmission networks to 25,000 circuit kilometres to meet rising demand.

The proposed budget also includes incentives for green energy, including a zero percent tax rate on the solar power sector until 2035 to encourage clean energy adoption.

The government plans to meet 20 percent of electricity demand through renewable sources by 2030, while also proposing a 5 percent tax rebate for consumers paying solar electricity bills.

In the annual development programme (ADP) part of the budget, the finance minister proposed Tk 17,192 crore of which energy division would get Tk 2,254 crore and power division Tk 14,938 crore.

In the outgoing 2025-26, the budgetary allocation for power, energy and mineral resources ministry was Tk 22,520 crore and in the revised budget the amount stood at Tk 16,951 crore.

The ADP allocation for outgoing fiscal was Tk 22,370 crore while the revised ADP sanctioned Tk 16,809 crore.

Chowdhury said the government took various initiatives for oil and gas exploration, increase production, expand refining capacity and diversify import sources to ensure energy security.

He said that model production sharing contract (PSC) with petroleum explorers was revised to particularly to attract international oil giants for offshore exploration safeguarding national interests.

“We are prioritising exploration and 72 production of natural gas both onshore and offshore to strengthen domestic capacity through BAPEX (Bangladesh Petroleum Exploration and Production Company Limited),” Chowdhury said.

He said that plans were adopted to undertake 270 km of geological surveys, 700 line-km of two-dimensional (2D) seismic surveys and 700 square kilometres of three-dimensional (3D) seismic surveys during FY2025-26 to FY2027-28.

He said the BAPEX also plans to drill 69 wells and carry out workover operations on 31 wells using its own drilling rigs.