From August 2024 to mid-June 2025, ten months have whistled past. For a non-political, unelected regime inheriting a trouble-prone energy and power sector, it is not enough time to restructure, reorganize, and turn things around. But ten months is also not too little to expect formulation of policy changes, planning of reforms, and launching of programs for good governance, transparency, and accountability. Judging from the prevailing situation in Bangladesh’s power and energy sector, the interim government could have introduced fundamental changes to bring the derailed sector back on track. Achieving sustainable energy security still appears to be a significant struggle.
The government has not changed much; the bureaucracy-dominated energy and power sector administration could neither improve governance, nor create incentives for employees, nor ensure transparency and accountability. The Integrated Energy and Power Master Plan (IEPMP) has not been updated. The government has made no decision on exploiting discovered coal reserves, nor has it expedited exploration of petroleum resources, both onshore and offshore. As a result, the sustainable supply of primary fuel for energy generation remains in crisis.
Although the government managed to provide funds to BPDB and Petrobangla to pay off outstanding dues, it failed to recover massive arrears from energy and power users. Domestic gas field production continues to deplete alarmingly, increasing reliance on imported LNG. A crisis could erupt if the LNG supply is disrupted during the high monsoon. However, power supply remains under control, mainly because demand hasn’t reached the high levels seen last year. In brief, the situation is business as usual. The woes of end users remain unaddressed. People still cannot see any light at the end of the tunnel.
The government repealed the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010, but simultaneously protected all existing contracts. It also reversed amendments to the BERC Act, which allowed the government to set tariffs and fuel prices. However, the tariff adjustments already made remain protected, effectively preventing BERC from conducting reviews. It is difficult to say if end users benefited at all from these two actions by the interim government.
The interim government appointed a committee to prepare a white paper, which highlighted major incidents of corruption in the energy and power sectors. Yet, in ten months, not a single case of corruption has been proven. Contracts with Adani, Bangladesh-India Friendship Power Company Ltd., and Rooppur NPP remain in force. The government abruptly cancelled the contract with Summit Group for the 3rd FSRU, as well as several gas well drilling and solar power LOIs. In ten months, not a single contract was signed for petroleum exploration, LNG terminal development, or related infrastructure. No significant progress has been made in reducing the high system loss in the gas supply chain. There is no major change in how Petrobangla companies operate. It is difficult to be optimistic that any significant positive change will occur during the remainder of the interim government's tenure.
Primary Energy Supply: A Major Concern
Experts, stakeholders, and the business community expected that the interim government, having no political agenda, would take the bold decision to mine the country’s discovered coal reserves. Technically and financially, domestic coal is the cheapest fuel option for Bangladesh. If mined using appropriate methods with due environmental and social safeguards, this could ensure sustainable energy security for at least 20 years. But the present government appears to lack the courage to take this decision.
Similarly, it has done little to accelerate petroleum exploration onshore and offshore. Despite BAPEX's efforts, the current pace is inadequate. It is highly unlikely that the targeted drilling of 50 wells by June 2026 and 100 wells by 2028 will be successful. Existing activities also do not indicate the possibility of new LNG imports before 2028.
Regrettably, the government could not take the right initiative to connect Bhola’s stranded gas to the national grid. Why has the WRIP-identified pipeline ROW not been utilized to build a pipeline from Bhola to Khulna via Barishal? The gas-starved southern regions—greater Barishal and Khulna—urgently need this pipeline. Bangladesh must engage a competent international pipeline construction firm, equipped with lay barges and swap buggies, to construct the pipeline across challenging terrain. Bhola gas fields must be connected to the national grid at Khulna as soon as possible. Later, a pipeline from Barishal to Dhaka can be considered.
Strengthening Petrobangla Companies
It was expected that the interim government would restructure Petrobangla and its companies, perhaps inducting experienced professionals into their boards. But in ten months, apart from replacing current bureaucrats with former ones, no meaningful policy or governance reforms have occurred. Petrobangla companies have not improved in terms of competence or efficiency. It is unlikely that coal exploration will begin soon or that gas supply will improve. Instead, energy supply will become increasingly reliant on imported LNG, coal, and liquid fuel.
It has been reported that junior and mid-level technical staff are leaving Petrobangla companies due to low pay and a lack of incentives. This exodus is weakening the technical capabilities of companies that urgently need modern, tech-savvy professionals.
Managing Summer Load and Gas Supply Challenges
Some observers note that the interim government managed March, April, and May’s power demand and gas challenges better than expected. Several factors favored the government. Until the end of May 2025, weather conditions helped keep power demand manageable. The government also allowed expensive liquid fuel-based power generation to play a greater role.
However, diverting more gas to power generation severely disrupted industrial supply, triggering strong protests from entrepreneurs. The government did succeed in paying off outstanding dues to energy and power suppliers, but energy and power companies are still burdened with huge receivables from users.
What Can the Interim Government Do Before It Leaves?
It is unlikely the interim government can start coal mining or sign agreements with IOCs for petroleum exploration before handing over power. But it still has time to launch some initiatives for meaningful structural reforms in the energy and power sectors. These include:
- Reviewing and updating the Integrated Energy and Power Master Plan (IEPMP) in consultation with stakeholders, leaving behind a realistic and implementable roadmap.
- Revising procurement policies in the energy and power sectors to improve transparency and competitiveness.
- Reviewing import duties, VAT, and taxes on renewable energy equipment such as solar panels, inverters, and batteries.
- Allowing energy and power companies to operate autonomously as per their Articles of Association, free from excessive government interference. BERC should regulate as per its mandate under the BERC Act.
- Reassessing the coal mining option through audits and review of SODs by accredited mining consultants. A clear, actionable plan should be left for the next elected government.
- Updating the Model PSCs (Production Sharing Contracts) for offshore and onshore petroleum exploration to make them more transparent and balanced.
Making power and energy companies more accountable to a reorganized and professional BERC.
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