Impediments To Inflow Of FDI In Energy & Power Sector Of Bangladesh

In the current critical situation of Bangladesh's uncertain energy security, the sector desperately needs the free flow of foreign direct investment (FDI) across all segments of the energy and power supply chain.

- Saleque Sufi

Unfortunately, due to the sweeping changes in policies and strategies of the interim government since August 2024, a sense of insecurity and lack of confidence has developed among prospective investors. The interim government did a commendable job by scrapping the Speedy Power Supply Special Act 2010 and amending the BERC law to restore the exclusive authority of BERC to determine power tariffs and energy prices. However, at the same time, cancelling some signed contracts for energy supply infrastructure development and the LOIs issued to set up utility-scale solar power plants raised concerns among policymakers about the stability and consistency of policies. Investors cannot make risk investments in an uncertain situation. They need consistent policies and stability in making decisions. We have already seen that there was no response to Petrobangla’s PSC bidding for offshore exploration. We are unsure that there will be an encouraging response to the BPDB tender for utility-scale solar power plants as well. There is also a fear that Petrobangla may not receive a good response from leading drilling companies when they will go for inviting bids for drilling at some structures in the Chottogram Hill Tracts and later for onshore exploration. We want transparency and accountability in the awarding of 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 a sustainable supply of primary fuel is concerned. The country’s proven gas resource is alarmingly depleting. Bangladesh cannot continue paying huge subsidies to the power sector now relying over 55% on imported energy. The government still appears hesitant to make decisions on exploiting its coal resources. The Energy Adviser appears not to have the correct vision of the Private Sector Power Policy and IPP. Bangladesh must find a solution soon to relieve the power and energy sector o