[🇧🇩] Energy Security of Bangladesh

[Saif]

A repeal that retains impunity

Why is the interim government taking this seemingly anti-public stance?

www.thedailystar.net

Quick Enhancement of Electricity and Energy Supply Act
A repeal that retains impunity

FILE VISUAL: ALIZA RAHMAN

During Sheikh Hasina's rule, the power and energy sector enjoyed the ultimate lack of accountability. This is the first sector where the fascist regime established an ideal model for political and economic corruption, and later implemented it in other sectors, including education, health, and transportation.

The basis of this structure was a black law, the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010, which contradicted the constitution's basic principles, undermined public interests, and destroyed the country's economic capacity. After the fascist regime's fall and during the interim government's tenure, the demand to repeal this law quickly took shape. In the meantime, the validity of two of its sections, which were most detrimental to public interests, were challenged in the High Court followed by their annulment. Eventually, the government issued an ordinance to repeal the entire law. But two articles were added in that ordinance that are potentially more dangerous than the repealed law. They not only undermine public interests, but also degrade the spirit and aspirations of the July uprising.

But why is the interim government taking this seemingly anti-public stance? Before we look for the answer, let's see what this law actually contained and what became of it after the repeal.

The black law's history and evolution

Often termed the "Impunity Act," the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act was supposed to be in force for a period of two years from 2010, but was later extended for a total of 16 years in four phases, with the implementation period being till 2026.

Under the sub-heading "Publicity of the plans or proposal," Section 6(2) states, "Notwithstanding anything contained in sub-section (1), the Processing Committee mentioned in section 5 shall consult and bargain with a single or limited number of organizations about any purchase, investment plan or proposal and, with approval of the Minister, Ministry of Power, Energy & Mineral Resources, select an organization for the said work..."

That is, work can be awarded, with the consent of the minister, through communication and negotiation with a single or limited number of organisations, ignoring competitive tenders or bids.

Under the sub-heading "Bar to jurisdiction of Court, etc," Section 9 states, "No question regarding the validity of any act done or purported to be done, any action taken or any order issued or direction given under this Act, shall be raised in any court."

After Hasina's fall, Supreme Court lawyers Dr Shahdeen Malik and Tayeb-Ul-Islam Showrov filed a writ with the High Court, challenging the validity of sections 6(2) and 9. On November 14, 2024, the High Court bench of Justice Farah Mahbub and Justice Debashish Roy Chowdhury declared the provisions illegal. Then on November 28, 2024, the interim government repealed the law by promulgating the Quick Enhancement of Electricity and Energy (Special Provisions) (Repeal) Ordinance, 2024.

New 'impunity' in the ordinance

In the repeal ordinance itself, the government has added new provisions for impunity in sections (2)(a) and (b) under Article 2.

Section (2)(a) states, "Any contract entered into or any action taken under a contract entered into under the said act immediately before such repeal shall be deemed to have been validly entered into or taken."

Section (2)(b) goes on to say, "Any proceeding under a contract entered into or taken under the said act shall continue or be carried out as if the said act had not been repealed."

That is, all projects taken under the law till the repeal have been considered valid, and can continue. That means the government has repealed the law but considers all the previous sins as virtues. This is against the constitution's fundamental rights, the consumer's fair rights, and a violation of energy justice. This ordinance has set a terrible precedent by hindering fair energy transition.

So, is the repeal ordinance an attempt to protect the interests of the corrupt oligarchic class in the power and energy sector? Or is there a subversive attempt to make this government unpopular and lead it astray? Let us explore the possible reasons.

First, the power and energy ministry was known as a hotbed of corruption and misrule during Hasina's rule. An anti-national nexus of dishonest bureaucrats, businesspeople, and politicians was the driving force behind this misrule. They have created an oligarchic class and looted the sector by establishing a legal framework. This class has thrown away the people's rights by making plunderous expenses, and in turn, profits.

Because of them, the cost of generating electricity per unit grew from around Tk 2 in 2009-2010 to above Tk 11 in 2023-2024. Because of them, Bangladesh's power and energy sector has lost its domestic capacity and has become an import market.

This oligarchic class has gradually weakened the sector's public branch and enriched privatisation in the name of reform. They have created opportunities to loot thousands of crores in the name of capacity charges by keeping private power plants idle for years. To continue this looting and shield criminals of the fascist era, they have imposed these provisions.

Second, the current energy adviser, who is the former energy secretary, is not keen on breaking the cycle of privatisation. That is why, although the new government formed reform commissions on 11 issues, none has been formed for the power and energy sector as yet. Such anti-people decisions indicate towards his new position not being free from conflict of interest.

Third, the main spirit of the student-mass uprising was to eliminate discrimination. But discriminatory provisions have been left in place to stop all competition in the energy sector.

Fourth, the nexus of corrupt bureaucrats, businesspeople, and politicians—who are allies of autocracy and are trying to prevent progress—has re-emerged. These looters of public wealth are determined to protect laundered money and have facilitated these new provisions.

By providing new legal protection for these crimes, the government has shown that the ghost of tyranny is still present, and instead of chasing it away, it may very well be protecting it.

Shuvo Kibria is a senior journalist and engineer.​

 

[Saif]

LNG deal with US co raises energy security risk

The deal that Bangladesh has recently signed with the Louisiana-based Argent LNG to import liquefied natural gas is set to increase energy risks and unreliability, energy experts have warned.

www.newagebd.net

LNG deal with US co raises energy security risk
Emran Hossain 04 February, 2025, 23:28

The deal that Bangladesh has recently signed with the Louisiana-based Argent LNG to import liquefied natural gas is set to increase energy risks and unreliability, energy experts have warned.

They believe that the American company will emerge as the main beneficiary of the non-binding deal, using Bangladesh’s reputation as a potential buyer to secure finance needed to launch its business.

On January 24, the Bangladesh Investment Development Authority signed a non-binding deal with the Argent LNG to purchase five million tonnes of LNG annually.

Identifying the Argent LNG project highly uncertain as it, with a deadline of becoming operational by 2030, could not yet start constructing necessary infrastructure, the US-based Institute for Energy Economics and Financial Analysis warned that buying LNG from the USA market would expose Bangladesh to even more external shocks.

‘Argent LNG still has a long way to go in securing binding deals with customers before it can secure financing and proceed to construction,’ said Sam Reynolds, LNG and gas research lead for Asia at the Institute for Energy Economics and Financial Analysis, wrote in an email communication with New Age over the LNG deal.

Argent LNG is facing serious challenges in securing finance and binding contracts from creditworthy buyers amidst a rush of such projects being implemented worldwide, including in Qatar and the USA, according to the institute.

On its website, the Argent LNG speaks about its ambitious plans to supply fuel to power generation assets across Japan, Southeast Asia, Europe, South America, the Caribbean, the Middle East and North Africa.

The amount of LNG that Bangladesh agreed to import will represent half the capacity that the Argent LNG plans to have at its initial stage. Eventually, the company plans to increase its capacity to 25 Million Tonnes Per Annum (mtpa).

‘The deal is unacceptable, replete with irregularities and flaws,’ said prominent economist Anu Muhammad, also a former member secretary of the National Committee to Protect Oil, Gas, Mineral Resources, Power and Ports.

Bangladesh’s national fuel, gas and minerals company Petrobangla, which signs such power and energy deal, expressed its ignorance after the deal with the American company was signed in Washington by the BIDA.

The interim government had promised that the days of having power and energy deals without tender were over with the ouster of the Sheikh Hasina-led regime amid a student-mass uprising in last July-August. As part of its pledge, the interim government even scrapped the indemnity law allowing deals sans tender.

Energy division secretary and Petrobangla chairman did not answer New Age calls made for comments.

BIDA executive chairman Chowdhury Ashik Mahmud Bin Harun on January 26 defended the signing of the deal as the opening step in a process that would complete after many negotiations.

He said that any future binding agreement would adhere to Bangladesh’s legal framework.

‘The deal signifies the incumbent government’s lack of respect for what people need,’ said Anu Muhammad.

LNG as a source of energy proved unreliable during the past Awami League regime, which introduced it in 2018, leading to serious economic consequences.

Bangladesh descended into its worst energy crisis, accompanied by a prolonged spell of unprecedented inflation, within years of the start of LNG import that was done through long-term contracts and spot market purchases.

The dollar crisis that hit in 2022 was largely due to import of energy, mainly LNG.

Bangladesh spent Tk 1.73 lakh crore on LNG import until September last year since 2018. The outstanding LNG bill stood at Tk 1,787 crore in September.

Consumers experienced frequent price hikes since the LNG import started with household consumers seeing their energy bill inflate by as high as 35 per cent, hotels and restaurants by 79 per cent and industries by about 200 per cent so far.

Still, Bangladesh was far from witnessing an end to its energy crisis, supplying about 2,700mmcfd in best case scenario against the demand of 4,000mmcfd, about a fourth of which was LNG.

‘Bangladesh actually needed to move away from LNG,’ said Hasan Mehedi, member secretary, Bangladesh Working Group on Ecology and Development, a platform of green activists.

Money was not the only problem, Hasan Mehedi said, infrastructure challenges emerged as important as financial factor in disaster-prone Bangladesh.

Last year, one of the two floating storage and regasification units remained out of operation for six months between January and September after the cyclonic storm Remal hit, said a report of the Institute for Energy Economics and Financial Analysis.

Such incidents recurred since 2018, showed the report, affecting both the regasification units, prompting authorities to cancel LNG cargoes one after another.

Equipment issues also prompted suspension of operations at the units.

‘What is frightening is the government trying to pass the deal as a big one as well as a big strategic move,’ said Hasan Mehedi.

The non-binding deal has no indication of the potential LNG price. The IEEFA, however, predicted that the product would be expensive, given that the cheapest LNG supplier in the world is Qatar.

The US gas market has been rather stable lately but is likely to hike prices in future due to increase in demands, the IEEFA observed.

Bangladesh would also need to spend more on transporting LNG from the Gulf of Mexico, about 15,000km away, double the distance current LNG supplies arrive from.

‘The price that Bangladesh pays for LNG would depend on gas market fundamentals in the United States, leaving the country highly exposed to factors beyond its control,’ said Sam Reynolds.

More viable options could have been signing long-term deals with nearby LNG suppliers given many new LNG projects are under construction, energy experts further observe.

‘Bangladesh stepped into a trap by signing the LNG deal,’ said Hasan Mehedi.

Energy expert Badrul Imam described the deal as a frustrating development.

‘More LNG expense means fewer resources for exploration,’ he said.

‘It does not end the energy crisis, rather threatens to increase it,’ said Badrul.

Having admitted that he was informed before signing of the deal, Energy adviser Muhammad Fouzul Kabir Khan, however, told New Age that the deal carried very little significance.

Asked about the potential benefits and risks of the deal, he asked the reporter to get the answers from the BIDA, while adding that they found some of the questions too hypothetical to be answered.

‘Can energy prices be predicted five years in advance? The cost of transportation might not always depend on the distance,’ he said.

‘Above all, the company (Argent) does not have any gas in its reserve. There is no question of buying at the moment,’ he added.

From the adviser’s explanation it is apparent that the energy ministry within its legal framework has no option to go ahead with the non-binding agreement as deals can be achieved by three means—open tender, government-to-government and public-private partnerships. While public-private partnership often faces question over the selection of private partner, competition remains the most transparent way of buying the products.​

 

[Saif]

No load shedding expected in Ramadan: Adviser

Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan on Wednesday hoped that there would be a power outage during the month of Ramadan. “A plan was taken to keep the country free from load shedding during the Ramadan. But some areas of the country might experience load shed

thefinancialexpress.com.bd

No load shedding expected in Ramadan: Adviser
BSS
Published :
Feb 05, 2025 19:28
Updated :
Feb 05, 2025 19:28

Advisor Muhammad Fouzul Kabir Khan addressed an inter-ministerial meeting at Bidyut Bhawan on Wednesday. Photo : BSS

Power, Energy and Mineral Resources Adviser Muhammad Fouzul Kabir Khan on Wednesday hoped that there would be a power outage during the month of Ramadan.

“A plan was taken to keep the country free from load shedding during the Ramadan. But some areas of the country might experience load shedding during the summer,” he said.

Addressing an inter-ministerial meeting on power and energy supply during the upcoming Ramadan and irrigation season at Bidyut Bhaban, he said load shedding occurs due to various reasons.

“We have given instructions to avoid load shedding except for technical reasons,” the adviser said.

He said that the electricity demand during the summer and irrigation season has been estimated at 18,000 MW, out of which 6,000 MW is required for the cooling (AC) system.

“Around 900 million cubic feet per day (mmcfd) gas is now being supplied for electricity generation, which will be 1200 mmcfd during Ramadan to produce additional electricity, Fouzul Kabir said.

The adviser said that the gas supply will be 1100 mmcfd from April to September (Summer Season). During the Ramadan, the electricity demand will be 15000 MW. But we have made preparations for an uninterrupted power supply.

If we can keep the AC temperature up to 25 or 26 degrees Celsius level, the demand will be reduced by 2000 to 3000 MW. And then there will be no need for load shedding, he said.

Fouzul Kabir said that load shedding happens due to a shortage of primary energy supply and technical reasons.

Meetings with concerned departments were held to ensure sure availability of funds and got assurance to procure necessary fuels for power generation during Ramadan.​

 

[Saif]

Industries reeling from persistent gas crisis

Industry insiders have said that due to years of interruption in gas supply, export-oriented industries and other manufacturing units were facing an acute crisis...

www.newagebd.net

Industries reeling from persistent gas crisis
Saddam Hossain 06 February, 2025, 22:47

A file photo shows a man working in a cotton textile mill. Industry insiders have said that due to years of interruption in gas supply, export-oriented industries and other manufacturing units were facing an acute crisis. | New Age photo

Industry insiders have said that due to years of interruption in gas supply, export-oriented industries and other manufacturing units were facing an acute crisis.

They also said that the country’s major industries, such as textiles, ceramics and the captive power plants of the readymade garment industry, require a gas pressure of 15 per square inch, but they usually get 2 or 3 PSI, even sometimes zero.

Factory units located at industrial hubs like Dhaka, Narayanganj, Gazipur, Narsingdi, Manikganj and Mymensingh are facing acute interruptions in the gas supply.

Moreover, the country cannot import sufficient LNG due to a reserve crunch, said the industry people.

The country requires around 4,000 million cubic feet per day (MMcfd) of gas, including imported energy. The current supply is under 3,000 MMcfd, leaving a supply deficit exceeding 1,000 MMcfd.

Talking to New Age, Showkat Aziz Russell, president of the Bangladesh Textile Mills Association, said that 50 per cent of the textile mills had been closed due to a gas shortage.

‘Our loan is becoming classified as overdue in the bank is increasing. We yet to receive any instructions from Petrobangla or any other government authority,’ he added.

The government did not import fertiliser on time, and now it diverts gas to fertiliser factories, further worsening the situation.

The BTMA president urged the government to review contract signed under the previous regime according to the price index.

He also said that if the government does not take immediate action, the workers of the closed factories might take to the streets.

The ceramic industry is a fully gas-dependent process industry. Gas is considered a raw material and there is no alternative fuel to gas in this sector.

According to industry insiders, ceramic factories need a pressure of 15 PSI, but they experienced drops to as low as 2 or 3 PSI or even zero.

Talking to New Age, Moynul Islam, acting president of the Bangladesh Ceramic Manufacturers and Exporters Association, said that most of their factories run at 50 per cent of their total capacity.

‘Due to acute gas crisis, our sector is incurring loss of nearly Tk 300 crore per month. Even Petrobangla couldn’t share any measures or future prospects about the improvement of the situation,’ he added.

Petrobangla told them that the situation may improve soon only if adequate LNG was imported or if they can explore new gas fields.

‘In the last 9 years from 2015 to 2023, the authority hiked the gas price by about 345 per cent and in 2023, they increased the price by about 150 per cent and promised us to supply uninterrupted gas, but they can’t,’ Moynul said.

He also said that more than 50 registered ceramic companies had suspended their reinvestments due to the gas crisis alone, including five newly established factories that could not start production.

The readymade garment sector uses gas mainly to generate captive power. Due to the interruption in the gas supply, the industry is also facing multifaceted challenges.

Md Abul Kalam, managing director of Chaity Group and panel leader of Shammilita Parishad of the Bangladesh Garment Manufacturers and Exporters Association, told New Age that due to the gas crisis, the sector’s production had decreased by about 25 per cent.

Moreover, as the textile sector has been affected, the RMG sector is also facing problems getting raw materials.

‘Since we generate power through gas in our sector, disruption in gas supply is also damaging our machinery, reducing its lifespan, increasing maintenance costs and damaging sensitive components,’ he added.

He also said that despite increasing the price of gas by almost twofold in 2023, the authorities were not able to supply gas uninterruptedly, as they promised.

In the last week of January, the apex trade bodies of the country’s major four industrial sectors, BGMEA, BKMEA, BTMA and BTTLMEA, sent a joint letter to Muhammad Fouzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources.

In the letter, the manufacturers said that the factories were operating on insufficient gas pressure and uncertainty and were suffering substantial financial losses.

The letter also stated that production in the industry-dense area had decreased by 50-60 per cent due to gas shortage, which has disrupted the supply chain and factories’ production.

Moreover, the timely supply of raw materials to the RMG sector cannot be ensured, which disrupts timely shipments.

Recently at an event at the ERF, the energy adviser Muhammad Fouzul Kabir Khan said that the situation was unlikely to improve until new gas fields were developed in the country.

Despite repeated attempts, Petrobangla chairman Md Rezanur Rahman could not be reached for a comment regarding the situation.​

 

[Saif]

Interim govt’s energy policy echoes AL-era essence

THE interim government appears to be missing out on the chance to walk away from the power and energy policy that the previous Awami League government had continued since 2009 to offer predatory profits to independent and rental power producers. An absence of effective initiatives on part of the...

www.newagebd.net

Interim govt’s energy policy echoes AL-era essence
07 February, 2025, 00:00

THE interim government appears to be missing out on the chance to walk away from the power and energy policy that the previous Awami League government had continued since 2009 to offer predatory profits to independent and rental power producers. An absence of effective initiatives on part of the interim government, which has been in office for about six months, to rein in profiteers that the Awami League government had placed in the power and energy sector has already come to be criticised. Whilst the power plants set up then by profiteers continue to bleed the economy, at a time when the government is trying to bring about economic and other reforms, experts say that there are laws and ways to stop the profiteers from being unjustly benefited. But the interim government has maintained that the cancellation of the agreements is difficult. The signing of a non-binding agreement by the Investment Development Authority on January 24 with the Louisiana-based Argent LNG on the import of five million tonnes of liquefied natural gas a year only comes as the expression of the interim government’s continuing with the Awami League-like power and energy policy.

Whilst experts say that the Argent agreement, replete with irregularities and flaws, could very well increase energy risks and unreliability, speakers at a seminar in Dhaka on February 5 said that the deal on liquefied natural gas import is nothing short of a reflection of how the Awami League government managed the sector that could perpetuate the reign of the syndicate of looters and the corrupt. The speakers have said that in the changed political context, the Argent agreement is a precursor to the continuation of what the Awami League did by allowing more than a hundred power projects under an energy indemnity law, sidestepping competitive processes. No tangible legal action against the Awami League-era power projects has so far been taken after the energy indemnity law was repealed in November 2024. The interim government could have had an exit from the flawed energy policy, but it took up a gas import project the way the Awami League did, which experts say is a surprise. The economic, environmental and public health consequences of the Awami League’s harmful power and energy projects appear to be getting a lease of life during the interim government.

The interim government should, therefore, review the agreement already signed and stop making such agreements in future.​