The recent announcement by Finance Adviser Dr Salehuddin Ahmed, confirming a comprehensive review of power purchase agreements signed under the previous Awami League government, marks a significant and necessary step towards restoring accountability in Bangladesh’s energy sector.
For years, civil society groups and energy experts have raised alarms over the opaque and often lopsided terms of contracts awarded to Independent Power Producers (IPPs).
Our newspaper on Wednesday reported that these concerns have now been echoed at the highest levels of government, with Dr Salehuddin highlighting “numerous deviations” in how these agreements were structured, particularly for capacity payments, fuel obligations, and legal immunities.
The most troubling element has been the widespread use of indemnity clauses under the Power and Energy Fast Supply Enhancement (Special Provision) Act, commonly known as the “Indemnity Act.” This legislation, introduced and repeatedly extended during the AL administration, provided blanket legal protection to those involved in the approval of major power sector deals. The High Court’s recent verdict declaring key sections of this Act unconstitutional represents a watershed moment. It affirms that public policy must be subject to scrutiny, rather than being shrouded in legal immunity.
The financial burden of these agreements is undeniable. Contracts guaranteeing capacity payments — regardless of actual electricity use — and offering dollar-based returns with sovereign guarantees have saddled the government with unsustainable fiscal obligations. This, in turn, has limited investment in state-run power plants, many of which were neglected in favour of private projects awarded with minimal transparency.
The adviser’s statement that legal experts will be engaged to support the review process is welcome. Reform must be rooted in due process and legal rigour, but also informed by the broader goal of aligning the power sector with national interests, not political expediency.
The High Court’s guidance to maximise the use of public sector plants should be taken seriously. A more balanced energy mix — one that integrates public, private, and renewable sources — is essential to long-term sustainability.
Bangladesh’s power sector can no longer afford to operate behind closed doors. The review now underway should lead not only to corrective action where necessary but also to a new policy framework built on transparency, fairness, and fiscal responsibility. Anything less would be a disservice to the people who ultimately bear the cost of misgovernance.
