2026: The Power Test

Bangladesh's power and energy sector faces deep structural challenges shaped by years of policy imbalance, rising import dependence, and financial strain.

- Mollah Amzad Hossain & Afroza Akther Pervin

While the interim government restored regulatory oversight and reduced massive arrears, it also cancelled key LNG and renewable initiatives, unsettling investors. Gas shortages, excess power capacity, mounting subsidies, and stalled exploration now threaten energy security. The next elected government must act swiftly to restore confidence, expand domestic fuel sources, and implement long-delayed reforms to avoid worsening economic and industrial disruptions.

Few sectors reveal the strengths and weaknesses of governance as starkly as the power and energy sector. Over the past year, Bangladesh's energy sector has undergone a rare moment of transition, marked by political upheaval, fiscal stress, and an urgent need to stabilize a system that has been stretched beyond its limits for a long time. While load-shedding has eased compared with the crisis peaks of 2022-23, the underlying pressures like gas shortages, rising import dependence, subsidy burdens, and investor uncertainty remain firmly in place.

The past 12-16 months have therefore been less about dramatic breakthroughs and more about difficult trade-offs. The interim government inherited a sector burdened by excess capacity, unpaid bills, controversial contracts, and policy distortions accumulated over more than a decade. Its task was not to build anew, but to stop the bleeding—restore regulatory order, clear arrears, and buy time before the next elected government takes over.

This review looks beyond the headlines of reform and controversy to assess what has actually changed in the power and energy sector during this transitional period—and, more importantly, what has not. By examining developments over the past 16 months, it seeks to identify the immediate challenges that will confront the next government from day one, when decisions delayed today will begin to exact their full economic and political cost.