2025 Looks Like A Hard Time

Bangladesh faces a critical power and energy crisis as 2025 begins, with over $5.0 billion in payment liabilities inherited by the interim government from the previous administration. Though initiatives have reduced the debt to $4.0 billion, the deficit remains significant. Energy suppliers have shown declining interest in LNG and cross-border electricity exports, while IPPs warn of supply constraints without cleared dues. These challenges signal tough times this year for the energy sector and the broader economy.

- Mollah Amzad Hossain

Bangladesh begins New Year 2025 with apprehension about the looming crisis in the power and energy sector and criticism over the issue. Expanding the power generation capacity without caring for increasing the supply of primary energy from own sources over the past one and a half decades turned power generation 50% dependent on imported fuel. Huge capacity charges are required for the plants to keep idle for failure to ensure fuel supply amid fund shortages. This has increased the power load-shedding and the cost of generation. The recently published white paper stated that payments of Tk 40,000 crore have been paid as capacity charges in the last 15 years. According to researchers and analysts, flawed policy, irregularities, corruption, and failure to adopt projects on a competitive basis over the past tenure of the deposed Awami League government have created the present unpalatable situation. The crisis started taking an alarming turn in the middle of terms in 2021. The authorities concerned neglected to take appropriate care and attention, causing an enormous crisis in the sector in 2023 due to huge debt liabilities. Despite the discomfort, the government continued taking up new projects. Issuance of bonds to make overdue payments for the sake of keeping the generation at a comfortable level did not help much. The dollar crisis emerged as a major issue for meeting the outstanding bills. Amid this crisis, the interim government assumed office following the Sheikh Hasina government that was toppled through an uprising in July-August 2024. A former bureaucrat Dr. Fouzul Kabir Khan has been made adviser for resurrecting the power and energy sector. From day one, he started taking initiatives to restore discipline and transparency in the power and energy sector. One of the initiatives was suspending and later canceling the previous government's policy to share responsibility with the Bangladesh Energy Regulatory Commission (BERC) to determine the electricity tarif