Impediments To Foreign Investment In Energy Sector

In the present uncertainty over energy security, Bangladesh desperately needs free flow of foreign investment in almost all segments of the energy and power supply chain.

- Saleque Sufi

Unfortunately, for sweeping changes in policies and strategies of the interim government since August 2024, a sense of insecurity and lack of confidence have developed among the prospective investors. The interim government did a commendable job in annulling the Speedy Power Supply Special Act 2010 and cancelled the BERC amendment for restoring the exclusive authority of the BERC for determination of power tariff and energy price. But at the same time, cancelling some signed contracts for energy supply infrastructure development and LOIs issued for utility scale solar power plants have created concerns among the policymakers about the stability and consistency of policies. Investors cannot make risk investments in an uncertain situation. They need consistent policies and stability in decision making. We have already seen that there was no response to PSC bidding for offshore exploration. We are unsure that there will be an encouraging response to BPDB's tender for utility scale solar power plant as well. Petrobangla may not also get good response from leading drilling companies when they go for tender for drilling at some structures in Chattogram Hill Tracts and later for onshore exploration. We want transparency and accountability in awarding contracts but at the same time we feel that circumstances and situations need to be considered while making sweeping changes as national energy security is extremely vulnerable as far as sustainable supply of primary fuel. Own proven gas resources are alarmingly depleting. Bangladesh cannot go on paying huge subsidies to the power sector now relying over 50% on imported energy. The government still appears hesitant to take decisions on exploiting local coal resources. The energy adviser appears not to have the correct vision of Independent Power Policy for the private sector investment in power generation. Bangladesh must find a solution soon on how to relieve the power and energy sector of the huge subsidy burden and at th