H. M. Nazmul Alam :
Bangladesh’s power and energy sector has long enjoyed a peculiar privilege. It consumes public money at an industrial scale while remaining remarkably immune to fundamental reform. The interim government inherited this privilege along with a swollen balance sheet, a weakened Bangladesh Power Development Board, and a policy architecture that seems designed to reward inefficiency while punishing consumers with ever-rising costs.
One year on, the question is no longer who broke the system, but whether the system has any real intention of being fixed.
The numbers alone tell an uncomfortable story. Over fifteen years, power generation capacity expanded roughly fourfold. The cost of that expansion, however, grew eleven times. This asymmetry explains much of BPDB’s current condition.
Despite receiving Tk 62,000 crore in subsidies in fiscal year 2024–25, the organisation still recorded an estimated loss of nearly Tk 9,800 crore. The audit is ongoing, but the direction is clear enough. BPDB remains trapped in a financial model where losses are structural, not accidental.
This is not merely an accounting failure. It is the cumulative result of policy choices that prioritised speed over scrutiny, capacity over coherence, and private comfort over public interest. The special legal regime that facilitated quick rental plants and IPPs did increase megawatts on paper.
It also normalised opaque contracts, long-term capacity payments for idle plants, and a purchasing strategy that favoured private suppliers even when government plants stood ready but unused. Predictably, private producers prospered while the public utility bled.
The interim government acknowledged this legacy early. Review committees and white papers diagnosed the power sector as among the most corruption-prone areas of the previous regime. Yet diagnosis, however accurate, does not equal treatment.
After more than a year, BPDB’s losses have not meaningfully declined. System losses have inched upward. The sector’s planning and procurement logic remains largely intact. The machinery that produced the crisis continues to operate with only minor adjustments, much like repainting a cracked transformer and calling it modernisation.
One of the most persistent blind spots has been transmission and distribution. Bangladesh invested heavily in generation capacity without a commensurate upgrade of the grid that must carry that electricity to homes and factories. The result is a paradox familiar to consumers outside major cities: surplus capacity coexisting with load shedding.
System losses rose from 10.06 percent to 10.13 percent within a year, with distribution companies still losing more than 10 percent of electricity, far above the international benchmark of around 2 percent. These losses are not abstract percentages. They translate into wasted fuel, higher subsidies, and higher tariffs that quietly transfer inefficiency from institutions to households.
Meanwhile, the promise of renewable energy has become a ritual incantation rather than a lived policy. Zero carbon emissions feature prominently in official rhetoric and align neatly with global climate discourse. On the ground, progress remains modest. Renewable capacity stands at about 1,689 megawatts, with grid-connected renewables accounting for just over 1,000 megawatts in a system whose total capacity exceeds 28,000 megawatts.
That is not a transition. It is a footnote.
Worse, the abrupt cancellation of letters of intent for renewable projects under a special law has created uncertainty rather than momentum. Many of these projects had already absorbed investment and preparatory costs.
Instead of renegotiating prices or restructuring terms, the blanket cancellations signalled to investors that policy stability remains optional. In a sector where financing horizons stretch decades, such signals carry weight. The result is fewer projects in the pipeline and a widening gap between stated targets and operational reality.
The government insists that policy frameworks for renewables are now more realistic and that initiatives such as rooftop solar installations in government offices mark a meaningful shift. These steps are not insignificant, but they are incremental.
They do not yet address the deeper question of how Bangladesh plans to replace gas and imported fuel at scale, nor how it intends to finance that transition without reproducing the same contractual distortions that crippled the conventional power sector.
Gas itself illustrates the dilemma. It remains a domestic resource and a convenient bridge fuel, yet its continued dominance delays investment urgency in renewable. Coal projects have slowed, but gas-based generation continues to expand because it is familiar and politically less risky in the short term. The risk, of course, is deferred rather than eliminated. Fuel imports, currency exposure, and climate commitments do not disappear simply because decisions are postponed.
The sector’s production mix further underlines the imbalance. In fiscal year 2024–25, private producers generated and sold over 35,500 million kilowatt hours, surpassing government plants, whose production fell to about 34,700 million kilowatt hours. Joint ventures increased output, but the fundamental dependence on private supply remains. This would be unremarkable in a well-regulated market. In Bangladesh’s case, it reinforces a pattern where public risk subsidises private certainty.
What is perhaps most striking is how familiar this conversation feels. For years, reports have warned about capacity overhang, idle plants, distribution bottlenecks, and unsustainable subsidies.
Committees have produced findings, white papers have diagnosed ailments, and roadmaps have been promised. The interim government now proposes a comprehensive master plan, to be prepared domestically with expert input and handed to the next elected government as a guide.
This is sensible, even responsible. But it also carries an implicit admission that transformative change may be deferred once again. The plan will outline what needs to be done, not necessarily what will be done.
The sector, it seems, has mastered the art of postponement. Every administration inherits a crisis, commissions a study, and passes along both to its successor.
The cost of this cycle is borne by consumers who pay higher tariffs, by taxpayers who fund subsidies, and by an economy that absorbs inefficiency as a permanent feature. Electricity, meant to power growth, becomes instead a reminder of how governance failures compound over time.
The sector does not collapse. It limps forward, expensive, inefficient, and politically sensitive enough to resist radical overhaul.
The interim government deserves credit for acknowledging the scale of the problem and for taking some corrective steps. But acknowledgement is not absolution. If reform means anything beyond rhetoric, it must confront the contractual architecture, the incentive structure, and the planning culture that turned capacity expansion into a fiscal burden. Without that, even the most elegantly drafted master plan risks becoming another document filed under future intentions.
Bangladesh’s power sector does not suffer from a lack of ideas. It suffers from an excess of half-measures. Until those changes, electricity will continue to flow unevenly, subsidies will continue to rise and fall without resolving underlying losses, and the promise of a cleaner, more rational energy future will remain just out of reach, brightly lit on paper, dimly delivered in practice.
(The writer is an Academic, Journalist, and Political Analyst based in Dhaka, Bangladesh. Currently he teaches at IUBAT. He can be reached at [email protected])
