DHAKA, October 19, 2026 - Finance and Planning Minister Amir Khosru Mahmud Chowdhury has expressed confidence that Bangladesh’s economy, including the energy sector, will stabilize by the second year of the government’s tenure, paving the way for stronger economic growth in subsequent years. Report BSS
“By the end of the second year, everything should be stabilized, including the energy sector. The third year should be about to take off, and the fourth and fifth years will be the take-off period,” he said.
The minister made the remarks at a high-level luncheon meeting titled “Sustainable Power and Energy: Driving Investment in Bangladesh,” organized by the Foreign Investors’ Chamber of Commerce and Industry (FICCI) in Dhaka on Monday.
Acknowledging the economic challenges facing the country, Khosru said the government had confronted a major energy crisis within a week of taking office following the outbreak of war in the Middle East. The crisis came on top of inherited financial liabilities and longstanding structural weaknesses.
“We have not done a great job, but we have not done too badly considering the crisis,” he said, estimating that the government had already faced an additional financial burden of around US$7 billion due to the energy crisis.
He emphasized that reliable and affordable energy had become essential for economic growth and industrial competitiveness amid geopolitical tensions and intensifying global competition. Reducing business costs, improving the investment climate and making domestic industries more competitive are therefore key priorities, he added.
Domestic gas exploration gets priority
Outlining the government’s plans to strengthen energy security, Khosru said Bangladesh would expand onshore and offshore gas exploration through production-sharing contracts (PSCs) and the state-owned Bangladesh Petroleum Exploration and Production Company Ltd (BAPEX).
“BAPEX is going to drill 150 wells,” he said, adding that the government had already approved the purchase of equipment for the company through the relevant purchase committee.
The exploration program is expected to help discover and develop domestic gas resources, reduce reliance on imported fuels and ease pressure on the country’s energy supply system.
Delivering the keynote address, Shafiqul Alam, lead analyst, Bangladesh, Institute for Energy Economics and Financial Analysis (IEEFA), warned that Bangladesh’s domestic gas reserves could be depleted by 2036 without new discoveries.
He called for accelerated exploration, reduced gas losses, wider adoption of rooftop solar and improved industrial energy efficiency to address the country’s growing energy challenges.
Government targets 10GW solar expansion
The finance and planning minister said the government was introducing policy measures and tax incentives to accelerate renewable energy investment, including incentives for solar projects and imported supporting structures.
The government aims to add around 10 gigawatts of solar power capacity over the next two to three years, a target Khosru described as achievable.
He noted that rooftop solar installations by households and industries were already increasing. The government was also allowing consumers to sell surplus electricity to the grid under arrangements designed to encourage investment in solar power.
Expanding renewable generation would help reduce gas demand in the power sector and ease pressure on gas-fired power plants, he said.
Khosru also said the government was considering ways to utilize domestic coal resources for power generation while taking political and environmental concerns into account.
New LNG infrastructure to address supply shortages
To tackle the immediate gas shortage and strengthen long-term energy security, the government is considering the development of three to four floating storage and regasification units (FSRUs), with private investors from countries including South Korea and China expressing interest.
However, Khosru cautioned that developing new FSRUs could take around 18 months, limiting their ability to provide an immediate solution to the current crisis.
The government is also exploring shore-based LNG terminals and additional oil storage facilities to diversify energy supply infrastructure and improve fuel security.
Potential sites include Matarbari and another location near Khulna, where a navigational draft of approximately 20 meters could accommodate large vessels and help reduce transportation costs.
The minister said the government expected to complete its broader energy security plan within two to two and a half years, covering LNG infrastructure, shore-based terminals and oil storage facilities.
Tax and regulatory reforms to attract investment
Khosru said the government was undertaking major reforms in taxation, financial-sector management and the broader regulatory framework to improve the investment climate.
Acknowledging longstanding weaknesses in tax administration, he said the government was reviewing inconsistencies in tax policies and engaging with the private sector to address them.
A key reform involves separating the National Board of Revenue’s (NBR) policy-making and enforcement functions to address conflicts of interest, improve administrative efficiency and reduce corruption.
He also described excessive regulation as a longstanding obstacle to economic growth, saying deregulation was a major government priority. However, he acknowledged that deep-rooted problems in tax collection, the financial sector and macroeconomic management would make the reform process challenging.
On investment mobilization, the minister said the government was receiving encouraging responses from multilateral development partners, bilateral sources and international capital markets.
He referred to the Prime Minister’s meeting with senior Wall Street representatives and expressed hope that foreign investment would support the energy sector, capital market and banking system.
The government is also exploring the establishment of an equity fund in Hong Kong dedicated to Bangladesh and advancing public-private partnerships (PPPs). In addition, it has begun disinvestment initiatives involving around 10 to 12 state-owned enterprises, including jute and sugar mills, to attract investment and make better use of existing industrial infrastructure and land.
Financial-sector stability crucial for recovery
The minister identified weaknesses in the banking sector and alleged large-scale capital flight as significant obstacles to economic recovery. He cited an estimate of US$235 billion taken out of the country and stressed that restoring financial-sector stability and strengthening the capital market would be essential to mobilizing investment.
He urged private-sector businesses to prepare for a challenging transition, expressing confidence that gradual reforms would improve economic stability and create a more investment-friendly environment.
FICCI calls for diversified energy supplies
Earlier, FICCI President Rupali Haque Chowdhury called for stronger domestic gas exploration, diversified LNG supplies, modernized energy infrastructure, improved energy efficiency and faster investment in renewable energy.
FICCI noted that global energy disruptions had exposed Bangladesh’s vulnerability to imported fuels, increasing industrial costs, disrupting production and creating uncertainty for businesses.
Participants in the panel discussion stressed the need for predictable regulations, investment-friendly policies, green financing and stronger public-private collaboration to ensure reliable and affordable energy supplies and sustain industrial competitiveness.
The discussion was moderated by Mahbub ur Rahman, chief executive officer of HSBC Bangladesh and a former director of the FICCI Board.
The panelists included Shu Xiong, president and managing director of Chevron Bangladesh; Professor Dr Mohammad Tamim, vice-chancellor of Independent University, Bangladesh; Dr Nazneen Ahmed, executive director of the Centre for Policy Dialogue (CPD); and Fazlul Hoque, administrator of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
