[🇧🇩] Energy Security of Bangladesh

[Saif]

Driving Bangladesh Bank’s low-cost green refinance schemes

With the utilisation rates of green funds remaining stubbornly low, Bangladesh Bank can evaluate the scope of prefinancing green projects.

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Driving Bangladesh Bank’s low-cost green refinance schemes

Industries reeling from previous energy price spikes would need to utilise low-cost green refinancing schemes for clean energy projects to offset increasing costs. FILE VISUAL: COLLECTED

Clean energy solutions require a significant commitment of capital from the private sector. Bangladesh Bank's low-cost green refinance schemes, offered at interest rates of up to five percent, can enable the private sector to channel this capital towards clean energy projects. These low-cost schemes increase the viability of clean energy projects as opposed to loans offered at market rates. However, information asymmetry, lack of awareness and lengthy disbursement processes prevent the proper utilisation of these schemes.

With the Bangladesh government mulling a hike in gas prices and industries reeling from previous energy price spikes, the latter would need to utilise low-cost green refinancing schemes for clean energy projects to offset increasing costs. This would necessitate addressing prevailing barriers.

The government may raise gas tariffs for industrial processes and captive power generation by 151 percent and 145 percent, respectively, owing to expensive liquefied natural gas imports. New industrial and captive connections will have to pay Tk 75.72 per cubic metre across the board, while currently they pay Tk 30 per cubic metre for industrial processes and Tk 30.75 per cubic metre for captive power. If approved, existing industries will pay the revised tariff for consuming gas beyond the sanctioned loads, while new industries will pay the revised tariff for total consumption. Moreover, the persistent revenue shortfall in the power sector may compel the government to raise power tariffs.

Burdened by the challenge of rising costs while trying to remain competitive in the market, operational industries will shift their focus to energy efficiency and rooftop solar. Besides, new industries will consider a "whole-system-design" approach to minimise their energy consumption by installing the most efficient technologies and harnessing natural light.

As higher energy tariffs send a strong signal for the rapid implementation of energy efficiency and renewable energy measures, the demand for low-cost green finance will soar in the country.

Bangladesh Bank launched a refinancing scheme for green products in 2009, initially known as the green refinance scheme for solar energy, biogas and Effluent Treatment Plant (ETP), with a modest funding size of Tk 200 crore. Later on, it enlarged the funding base to Tk 1000 crore and fixed the highest interest rate at five percent down from the previous 10 percent. It widened the ambit of eligible projects, including energy efficiency, green building, green industry and different renewable energy technologies.

The central bank also offers a low-cost Green Transformation Fund (GTF) of Tk 5,000 crore, which export and manufacturing oriented industries can obtain at up to five percent interest for green projects. The refinancing scheme for Islamic banks and financial institutions of Tk 125 crore is also suitable for clean energy projects.

However, data shows that between January 2018 and September 2024, entrepreneurs had a tepid response to green refinance schemes. The highest disbursement rate of the refinance scheme for green products reached 41.6 percent during the first three quarters of 2024 while the GTF's disbursement rate was only 19.05 percent. The refinancing scheme for Islamic banks and financial institutions registered zero disbursements during January 2022-September 2024 (see Figure 1).

Sources: Bangladesh Bank; IEEFA’s Analysis. *Technology Development Fund is excluded.

Given the funding sizes of Tk 1000 crore and Tk 5000 crore, respectively, the refinance scheme for green products and GTF can serve the growing need for clean energy projects, excluding grid-scale renewable energy plants. As the interest rate on traditional loans in the country is around 14-15 percent, these two schemes offering green finance at 5 percent interest are highly lucrative.

Accelerating the flow of green finance

There is information asymmetry among industries that refinance schemes are costly, and the loan tenure is not appropriate for clean energy projects. They find the central bank's refinancing process lengthy, with a requirement for many documents. Industries have other concerns too. They first apply to financial institutions for loans at market rates and then financial institutions proceed to Bangladesh Bank for refinance schemes. If the central bank does not approve applications for refinance schemes, industries would need to bear the high interest rates that may render their projects unviable. Additionally, capacity development of financial institutions is necessary to accelerate the flow of green refinancing schemes.

The central bank should periodically organise awareness-raising events for major stakeholders to address their concerns by ensuring that the interest rate for clean energy projects is up to five percent with a flexible loan tenure (up to 10 years). It should also debunk misinformation regarding the documents and lengthy process.

The Sustainable and Renewable Energy Development Authority (SREDA)–the nodal agency responsible for advancing clean energy in Bangladesh–should bridge the information gap that affects the use of low-cost green funds. The Bangladesh Solar and Renewable Energy Association (BSREA) can publish periodicals with updated terms and conditions of green refinance schemes for its members and stakeholders.

With the utilisation rates of green funds remaining stubbornly low, Bangladesh Bank can evaluate the scope of prefinancing green projects. Together with financial institutions, it can assess project proposals at an early stage and eliminate any uncertainty industries experience with the schemes.

Financial institutions should have sufficient capacity to understand different clean energy projects as financing a new industry and financing an old industry for retrofitting with energy-efficient equipment requires different appraisal processes. The latter necessitates an understanding of energy audit reports and making decisions based on energy-saving potential. Similarly, bankers should know the net-metering guidelines for rooftop solar.

Bangladesh Bank, SREDA and BSREA can work together to strengthen the capacity of bankers for clean energy project evaluation and financing. This capacity development should include ways of comparing different technologies, their energy-saving potential and quantifying their financial returns.

Soaring energy and power costs are expected to drive the demand for green finance at a faster rate than before. This demand, if met by optimally utilising existing schemes, will deliver double dividends. Not only can industries reduce their energy bills, but the country will also save money, which otherwise would be spent on fossil fuel imports.

Shafiqul Alam is lead energy analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA).​

 

[Saif]

Is this the right time to hike gas prices?

The Bangladesh Energy Regulatory Commission (BERC) is going to hold a public hearing tomorrow on the proposed hike in gas prices for industrial use.

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Is this the right time to hike gas prices?

The Bangladesh Energy Regulatory Commission (BERC) is going to hold a public hearing tomorrow on the proposed hike in gas prices for industrial use.

In a proposal submitted in January this year, gas suppliers suggested the government, through the BERC, hike gas prices by 150 percent for new gas connections and 50 percent for expansion of existing industrial units to Tk 75.72 per unit.

Businesses have expressed concern on different occasions over the issue, saying such an increase would kill industries by doubling the cost of production at a critical time.

The government's reason for hiking gas prices is to minimise subsidies to the energy sector and to cover the import price of liquified natural gas at higher prices.

Industry insiders say the country is becoming increasingly reliant on expensive imported energy -- with estimates suggesting the country will have more than 90 percent dependence on imported energy sources by 2030 -- instead of exploring domestic gas reserves.

Industry owners, especially entrepreneurs in the primary textile sector, which has investment amounting to around $23 billion, said that they are already overburdened by the abnormal hike in gas prices in February 2023, which caused prices to double from Tk 16 to Tk 32 per unit with a commitment to providing an adequate supply of gas.

However, industry owners complain that the gas supply did not increase, forcing them to run units at half of their capacity.

At the same time, around Tk 10,000 crore worth of unsold yarn has been stockpiled at different mills due to an influx of cheap Indian yarn, which is cheaper due to the subsidies provided by its government.

In case of Bangladesh, the government reduced the subsidy to 1 percent and Indian government gives more than 3 percent subsidy.

Of total gas consumption, captive power plants, including those in the primary textile sector and other industries, use 37 percent, according to data from the Bangladesh Textile Mills Association (BTMA), which added that gas prices were hiked by 256.5 percent over the past five years.

So, industry people and economists say that this is not the proper time to increase gas prices as it would not improve gas supply to industries.

Alongside the perennial gas crisis, the industrial sector has been struggling to survive in the face of the severe fallout of the Covid-19 pandemic, Russia-Ukraine war, high inflationary pressure and nationwide political upheaval last year.

A good number of work orders of the garment sector were shifted to neighbouring countries because of the political and labour unrest in Bangladesh last year.

The export-oriented textile and garment sectors are also facing a working capital shortfall owing to the devaluation of the taka against the US dollar and a shortage of US dollars in the banking system.

Moreover, the bank interest rate varies between 15 percent to 16 percent, making capital harder to access.

Anwar ul Alam Chowdhury, president of the Bangladesh Chamber of Industries, said if there is no growth in industries, they ultimately fall sick. The proposed price hike will not be viable now as the industries are going through a tough time, he added.

Khondaker Golam Moazzem, research director at the Centre for Policy Dialogue, echoed Chowdhury's views.

Moazzem said incidents of gas leaks are also higher in Bangladesh, which indicates that the sector lacks governance.

The gas price hike may not increase the gas supply, he said adding that even hiking prices may not be enough to end the crisis. So, it is a lame excuse that LNG supply will be increased by hiking the gas price, he said.

Masrur Reaz, chairman of the Policy Exchange of Bangladesh said the textile, garment and steel sectors will be hit hardest by the price hike.

He also believed the gas supply may not increase even prices are hiked.

Razeeb Haider, managing director of Outpace Spinning Mills Ltd, urged the government to explore gas in order to reduce the dependence on expensive imported LNG.

In the upcoming fiscal year, which begins on July 1, the subsidy allocation is likely to be Tk 112,000 crore, up from Tk 100,174 crore in the outgoing fiscal year.

The power sector is likely to get Tk 42,000 crore in FY25. The government had earmarked Tk 35,000 crore in FY24. Before FY22, the subsidy allocation for the power sector was between Tk 7,000 crore and Tk 9,000 crore.​

 

[Saif]

Expedite gas exploration, shift to renewables to reduce expenditure

Bangladesh should expedite gas exploration and place emphasis on renewable energy to reduce excessive expenditure on the energy and power sector, speakers said at an event yesterday.

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Expedite gas exploration, shift to renewables to reduce expenditure
Speakers say at CPD conference

Ilisha gas field in Bhola. File photo

Bangladesh should expedite gas exploration and place emphasis on renewable energy to reduce excessive expenditure on the energy and power sector, speakers said at an event yesterday.

To lower energy bills, they suggested the government ensure primary energy before setting up new power plants and renegotiate electricity prices with private power producers.

At the same time, analysts suggested the government strengthen the Bangladesh Energy Regulatory Commission and shape it as the supreme authority in power and energy supply.

These remarks came during a discussion session titled "Building Sustainable Futures: Connectivity and Energy" during a conference on "Recommendations by the Task Force on Re-Strategising the Economy" at the capital's BRAC Centre Inn yesterday.

Presiding over the session, Prof M Tamim, vice-chancellor of Independent University of Bangladesh, said there would be hard times ahead. He added that trouble might start sooner if the production at the Bibiyana gas field reduces.

"We are paying around $13 billion a year to import all types of energy sources and it may stand at $20 billion by 2030, by when estimates say Bangladesh will have more than 90 percent dependence on imported energy sources. Given the way the local gas production is going down, we will be in big trouble," he said.

"If even two or three wells in Bibiyana somehow fail to produce, what is the backup?" he asked, adding that though Bangladesh has committed to an energy transition, there are around 15,000 megawatts (MW) of fossil fuel-based power generation contracts.

He added that the previous Awami League government's aim of generating 40 percent of total power from renewable sources was made without doing any homework.

"We need a comprehensive plan engaging all stakeholders, including engineers of power grid companies. This would help us set a realistic target," he added.

Muhammad Fouzul Kabir Khan, adviser to the Ministry of Power, Energy and Mineral Resources, said the government is trying to reduce power generation costs to minimise the huge subsidy burden in this sector.

"We have set up a benchmark tariff with the Matarbari coal-based power plant and will try to renegotiate other coal-based plants accordingly. In the same way, we will renegotiate prices with the gas-fired power plants," he said.

Responding to a query, he said they would monitor cooling demand during the summer season based on the load of feeders managed by distribution companies.

"If we find a feeder's load unjustifiably high, then we will go for load-shedding in that area," he said, urging people to follow the government's instruction to set air conditioners at 25 degrees Celsius or above.

Bangladesh Energy Regulatory Commission Chairman Md Jalal Ahmed criticised the keynote paper for focusing mainly on the power sector.

"We are short on primary energy only. The current situation has arisen due to focusing solely on power generation. We have increased power generation capacity but neglected transmission and distribution," he said.

He added that the state-owned gas exploration company BAPEX has surveyed only 5,000 square kilometres, although there were plans in 2007-09 to survey 20,000 square kilometres within a year.

"Offshore exploration was all set and a company won the tender, but they weren't awarded the work. Gas exploration was not a priority for the previous government and as a result, we don't know if we have gas reserves or not," he said.

Former professor of the Bangladesh University of Engineering and Technology (BUET) Ijaz Hossain said gas production has been declining since 2017.

"At least 10 drillings should be done every year," he said, adding that renewable energy should also be prioritised.

"It is ridiculous that we are using furnace oil to produce electricity, which costs Tk 25 per unit, when we could harness solar energy at the lowest cost while the sun is shining," Hossain commented.​

 

[Saif]

No logic behind hiking gas tariff

The demand made by the Consumer Association of Bangladesh (CAB) for suspension of the scheduled public hearing on the proposed gas tariff rise on Wednesday is sure to enjoy popular support. Essentially, the rights group is against any further hike in gas tariff. However, its argument that the move

thefinancialexpress.com.bd

No logic behind hiking gas tariff
Published :
Feb 25, 2025 00:03
Updated :
Feb 25, 2025 00:03

The demand made by the Consumer Association of Bangladesh (CAB) for suspension of the scheduled public hearing on the proposed gas tariff rise on Wednesday is sure to enjoy popular support. Essentially, the rights group is against any further hike in gas tariff. However, its argument that the move to increase tariff for new industries, extended units of existing ones and new captive power plants is not in conformity with the spirit of the July-August uprising may not hold much water. Economic reality hardly respects considerations other than sound reasoning based on available constituents in a given situation. Of course, a search for cheaper alternative to the proposed measure can be a viable option. One of the CAB's demands stands out for its logical argument. It has suggested slashing of tariffs and subsidy by arresting illegal and illogical spending.

There is no need to go for drastic measures like the ones US President Donald Trump has opted for cutting US federal spending but economising on different areas of the energy sector can make quite a difference. Pilferage through illegal connection of gas and the alleged tampering with gas meters at some industrial units are some of the areas that need addressing immediately. The problem has its origin in the overdependence on imported gas and fuel oils to the misuse of gas obtained in the country's wells and reluctance to further explore this cheap source of domestic energy onshore and offshore. Apart from the Sylhet region where from gas has been extracted to its near depletion, the Chittagong Hill Tracts, a part of the eastern fold belt of the Bengal Basin thought to be potentially rich in hydrocarbon were totally ignored. One of the reasons was the challenging nature of the exploration there. But drilling of four wells at the Sitakund structure by the Indian Prospecting Company between 1908 and 1914 at the maximum depth of 1047 metres reportedly found presence of oil and gas there.

When crony capitalism rules the roost, there is an easy option for economic measures in the interests of the few instead of the larger benefit of the country. The nation is now paying heavily for dependence on imported liquefied natural gas, liquid oil and coal. Under the dubious arrangement of power generation by quick rental power plants indemnified by the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010, billions of Taka were embezzled and wasted in the name of capacity charge. This money was added to the cost and hence the rise in gas and power tariff.

With the scrapping of the indemnity energy law, the extra cost on account of misuse, irregularity and capacity payment is no more involved. The government is no longer bound to supply gas to those quick rental power plants and pay even if they do not generate power and supply the same to the national grid. But making the gas costlier, as proposed, by 152.40 per cent for new industries and extended units of existing ones and 141.96 per cent for new captive power plants, will act as a serious disincentive to the country's industrial base. Notably, captive power plants are installed by power-intensive industries where continuity and quality of power supply are crucial. If gas supplied to industries becomes outrageously costly, operation of many manufacturing plants will be uneconomical or the extra costs will be passed onto the consumers, adding to their woes. The move may prove counterproductive.​

 

[Saif]

BERC to hold public hearing today on gas price hike

The hearing will take place at the capital’s BIAM auditorium from 10:00am to 5:00pm.

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BERC to hold public hearing today on gas price hike

The Bangladesh Energy Regulatory Commission (BERC) is set to hold a public hearing today on the proposals to increase gas prices for industrial users, according to a notice from the commission.

The hearing will take place at the capital's BIAM auditorium from 10:00am to 5:00pm.

According to the proposals from the distribution companies and Petrobangla, gas prices for new industrial and captive power users will be determined based on the actual cost of LNG imports.

Industries exceeding their sanctioned load will be charged according to the same method.

Currently, they pay a flat rate of Tk 30.75 per cubic metre of gas used. If they exceed their sanctioned load, they are still charged the same rate. Under the new proposal, these industries will be charged Tk 75.72 per cubic metre for any gas usage exceeding the sanctioned load.

In addition, new industrial and captive connections will have to pay Tk 75.72 per cubic metre consistently. Instead of a fixed rate, the new pricing structure will be based on the actual cost of imported liquefied natural gas (LNG).

According to the proposal, those who have received primary approval for new connections will have to pay 50 percent of their bills at the existing rate for their sanctioned load, and the rest at the new rate.

Under the proposed policy, the gas price will be determined by the cost of LNG imports, calculated based on the average expenditure of the previous three months' total costs. This will include operational, transmission, and distribution charges, as well as contributions to the gas development, energy security, and research funds. A 15 percent VAT will also be imposed.

Between July and September 2024, Petrobangla imported a total of 1,726 million cubic meters of LNG for Tk 10,979 crore. The per cubic meter cost of LNG during that period was Tk 63.58, and after including all additional charges, the final cost per unit reached Tk 75.72.

Meanwhile, the Consumer Association of Bangladesh (CAB) has protested the hearing. They plan to hold a human chain in front of the venue before the event.​

 

[Saif]

PUBLIC HEARING ON GAS PRICE HIKE: BERC blasted by consumers

Frequent booing and screams of the word ‘shame’ filled the air inside the indoor venue in Dhaka where the Bangladesh Energy Regulatory Commission on Wednesday held its public hearing on the gas price hike proposal of up to 152 per cent...

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PUBLIC HEARING ON GAS PRICE HIKE: BERC blasted by consumers
Staff Correspondent 27 February, 2025, 00:12

Frequent booing and screams of the word ‘shame’ filled the air inside the indoor venue in Dhaka where the Bangladesh Energy Regulatory Commission on Wednesday held its public hearing on the gas price hike proposal of up to 152 per cent.

The first public hearing in about two years and eight months, it attracted a huge gathering of consumers, who branded the BERC as a ‘public enemy’.

Consumers rallied in a human chain even before beginning the hearing in the morning. The first session of the hearing ended in complete chaos amidst slogans calling the hearing a ‘farce’ and ‘anti-people’ reverberating around the almost-packed venue.

On January 6, Petrobangla asked for the price hike, proposing that the per unit costs of gas used in industries and captive power plants be raised to Tk 75.72 from Tk 30 and Tk 31.50 respectively.

While energy experts found such a proposal unrealistic, consumers found the hearing reminiscent of the injustices and misrule of the Awami League, one of which was passing arbitrary energy prices onto consumers’ shoulders.

‘Those who presented the price hike proposal acted rather like a postman. Their presentations reflect no use of intelligence, conscience, and commitment to the country,’ said Consumers Association of Bangladesh’s energy adviser M Shamsul Alam.

‘This hearing cannot be held without righting the wrongs done to people during the past political regime,’ he said as he began his speech after completion of the presentations by Petrobangla, six distribution companies, and the BERC’s technical evaluation committee.

The presentations apparently left many in the venue outraged as they burst into booing, which eventually evolved into slogans just before the lunch break, demanding immediate cancellation of the hearing.

‘The price hike will destroy the country’s industry, turning it into a global export destination,’ said Shamsul Alam, likening the BERC to a public enemy.

‘We demand to know the identity of the people who came up with the idea of the price hike. Is this what freedom looks like?’ asked Shamsul Alam before leaving the venue after placing three demands, giving the commission three days to scrap the proposal.

In their proposals, the Petrobangla and its affiliated organisations argued that the gas price needs to be raised to increase gas supply by importing more liquefied natural gas to boost employment, business and industrial growth, echoing the justification invariably given by the past AL regime each time it raised energy prices.

The price hike is aimed at generating Tk 3,240 crore for LNG import.

AL raised energy prices frequently, often more than once a year, throughout its rule. The hikes that came since 2023 happened without public hearing after the AL curtailed BERC’s authority by amending its law.

Communist Party of Bangladesh general secretary Ruhin Hossain Prince surprised by the striking similarity in the price hike proposal with that of AL’s, lacking any forecast on its impact on the people and the economy.

‘I demand to stop this farce,’ he said.

‘This hearing should have been called to discuss the corruption of the ousted AL regime,’ the CPB leader said.

Industrialists recalled how the last public hearing, held in June, 2022, was used by the fallen AL regime to increase gas prices from over Tk 16 to Tk 30 per unit, without caring for any justification.

They recalled a meeting with the government in which the estimated justifiable price ranged between Tk 20 and Tk 22. But the government had raised the price to Tk 30 anyway.

‘I recall industrialists receiving a maximum 7psi of gas supply against their sanctioned load of up to 40psi,’ said Bangladesh Knitwear Manufacturers and Exporters Association president Mohammad Hatem.

‘Does the commission want us to pay even more though the gas supply was never improved?’ asked Hatem.

Deliberating on the losses caused by the arbitrary energy pricing that left scores of factories either sick or closed down, the industrialists warned that the new proposal sent out a single message – stop industrial expansion.

Under the proposal, any new gas connection seekers in industries and captive power plants will have to pay the new price for their entire supply.

Those who were promised gas connections but are yet to get it will have to pay the new price for half of its sanctioned load and the old price for the rest.

Existing gas consumers will have to pay the new price if their consumption surpasses the sanctioned load, the proposal said.

‘How dare you! In the changed situation that cost sacrifices of so many lives, you come up with such a discriminatory proposal!’ wondered Bangladesh Terry Towel & Linen Manufacturers & Exporters Association president M Shahadat while addressing the commission.

Holding back new investments, which is very likely because of the prospect of Chinese industries relocating to countries like Bangladesh, implies losing out business to India and favouring ‘old AL oligarchs’ by allowing them to enjoy the old gas price.

‘Some vested group is surely working against our economy,’ said Bangladesh Chamber of Industries president Anwar-Ul Alam Chowdhury.

The industrialists, repeatedly demanding to know the names of the brains behind the price hike proposal, said that what the price hike would achieve was so much opposite to what the July-August movement wanted to achieve.

Leaders of the Bangladesh Ceramic Manufacturers and Exporters Association, the Federation of Bangladesh Chambers of Commerce and Industry, the Bangladesh Steel Manufacturers Association, the Bangladesh Textile Mills Association, the Bangladesh Garment Manufacturers and Exporters Association, liquefied petroleum gas businessmen, CNG Refueling Pump Owners Association, Bangladesh Incense Manufacturers Association, and Ganosamhati Andolan chief coordinator Zonayed Saki also spoke.

BERC chairman Jalal Ahmed ended the hearing by saying that views expressed at the hearing would be seriously considered before a decision on the matter.

Bangladesh’s current gas demand is about 4,000mmcfd, but the supply remains below 3,000mmcfd. In 2023-24, the average gas supply was 2,493mmcfd.

The TEC of the BERC concluded in its evaluation of the proposal that Tk 7.34 could be saved per cubic meter of gas by adjusting tax, which energy experts call illegal and excessive.​

 

[Saif]

Energy key to economic efficiency, says CA’s Press Secretary

CA’s Press Secretary Shafiqul Alam said on Wednesday energy is the key to economic efficiency and no economy can function optimally without fixing the sector. Speaking at the ‘Development Journalist Forum of Bangladesh (DJFB) Talk’ at the NEC Conference Room in Sher-e-Bangla Naga

thefinancialexpress.com.bd

Energy key to economic efficiency, says CA’s Press Secretary
FE Online Desk
Published :
Feb 26, 2025 18:26
Updated :
Feb 26, 2025 18:26

CA’s Press Secretary Shafiqul Alam said on Wednesday energy is the key to economic efficiency and no economy can function optimally without fixing the sector.

Speaking at the ‘Development Journalist Forum of Bangladesh (DJFB) Talk’ at the NEC Conference Room in Sher-e-Bangla Nagar, he criticised the previous Awami League government for mishandling the energy sector, which he claimed led to large-scale corruption and mismanagement, UNB reports.

“The entire system, like the capacity charge, was an arrangement for organized looting,” Alam alleged.

Citing findings from the White Paper, the Press Secretary stated that around $234 billion was laundered abroad during the previous regime. “Had this money remained in the country, it could have been reinvested to create jobs and boost economic growth,” he said.

Shafiqul Alam highlighted the current government’s focus on restoring macroeconomic stability. “We are seeing positive results as inflation has been declining for two consecutive months. We expect it to fall to around 7 percent by June, bringing much-needed relief to the people.”

He said that commodity prices are coming down and a stable inflation rate is helping maintain a steady exchange rate, positively impacting the development budget.

Blaming the previous government for destabilising the economy, he criticised the 9 per cent cap on both deposit and lending rates, and described the banking sector’s condition under the former regime as “daylight robbery while everyone was asleep.”

Despite these challenges, Alam expressed optimism about the interim government’s reforms, including improvements in the labor sector, enhanced efficiency at Chattogram Port and efforts to attract more foreign investment.

“We are working to restore discipline in the energy sector, pursuing policies like ‘no electricity, no payment’ and increasing the focus on solar power and regional energy cooperation through the Bangladesh-India-Bhutan-Nepal (BIBN) SA Electricity Grid,” he explained.

The government is also prioritising faster gas exploration, digitalising administrative processes to curb corruption, and attracting more foreign direct investment (FDI).

Alam stressed the importance of FDI in tackling unemployment and said the current administration had addressed issues that previously hindered foreign companies from repatriating profits. “These initiatives send the right signal to foreign investors that Bangladesh is committed to efficiency and tackling corruption,” he said.

He expressed confidence that Bangladesh would become a top performer in the global economy with ongoing reforms in the labor sector, improved port efficiency and enhanced energy management.

On law and order, Alam said the government had already taken nine measures to improve the situation and expected significant progress soon.

He also assured that the central bank had been working to restore discipline in the banking sector and protect depositors in troubled banks.

Addressing agriculture, Alam said the interim government was taking farmer-friendly initiatives to ensure food self-sufficiency.​

 

[Saif]

Bangladesh's energy transition comes to halt

Bangladesh’s energy transition came to an abrupt stop with the country’s interim government struggling to find investors in renewable energy projects.

www.newagebd.net

Bangladesh's energy transition comes to halt
Emran Hossain 01 March, 2025, 00:02

RE tender gets poor response

Bangladesh’s energy transition came to an abrupt stop with the country’s interim government struggling to find investors in renewable energy projects.

After assuming power following the fall of the Awami League regime amid a mass uprising in July-August, the interim government cancelled all 31 renewable energy projects in the pipeline with a combined capacity of over 2,600MW.

Just a step behind signing the power purchase agreement, the cancelled renewable energy projects had been awarded without tender, under the protection of an indemnity law.

But new tenders, floated in three phases since December 2024, sparked debate over the eligibility criteria, which energy experts found to be facilitating AL-era power investors, big companies and foreign investors.

The response to the tenders, however, has been very poor so far, prompting authorities to extend deadlines.

Only four renewable energy projects are currently under construction, scheduled to come online this year, with a capacity of about 100MW.

‘That’s probably all about new renewable energy projects to be implemented through next year,’ said Shafiqul Alam, lead energy analyst, Bangladesh, the International Institute for Energy Economics and Financial Analysis.

‘Investors are apparently unwilling to invest in Bangladesh now,’ he said.

Cancellation of the previous renewable energy projects, some of which involved foreign investors such as Marubeni Corporation, Total Gas, and Engreen Limited, caused trust issues, highlighting uncertainties in doing business in Bangladesh, energy experts said.

The foreign investors had spent millions, some of them $200 million, and over half a decade of their time in advancing their projects that were eventually cancelled.

The foreign investors scrapped agreements with banks, a prerequisite for signing PPA following the receipt of the letter of intent from the government to get the investment.

‘New renewable energy projects would not be bankable,’ said a former employee of one of the foreign investors, confirming the shutdown of their Bangladesh office.

Government guarantee is what made previous projects bankable, he said, adding that no such guarantee is achievable in the current process.

‘Getting assurance from the financially strained Bangladesh Power Development Board does not sound exciting,’ he said.

Floated on December 5, 2024, the first tender invited proposals for setting up 12 solar power plants with capacity between 10MW and 45MW in nine locations.

The deadline for the first tender was extended once due to poor response, prompting authorities to relax its eligibility criteria. The next deadline is March 5.

Initially, applicants, who could be individual firm or joint venture or consortium or association, would have to have experience in successfully implementing two ground-mounted grid-tied solar projects, each with a minimum capacity of 20MW.

One of the solar projects would have to be implemented outside the tenderer’s country, showed the tender document.

BD Rahmatullah, a former director general of the Power Cell, described the condition as discouraging to local investors while opening the market to big foreign companies.

‘Local renewable energy enthusiasts are desperately looking to find foreign partners, often in vain,’ he said.

During the past 15 years of the AL regime, 12 countries got involved in 75 renewable energy projects, including those that rolled into operation, with a combined capacity of 5,489.6MW.

China topped the list becoming engaged in building 22 power plants with a capacity of 1,601MW.

Bangladesh was involved in building 1,258MW, followed by Singapore co-financing solar power projects with a capacity of 728MW, the United Arab Emirates co-financing 470MW, Japan 400MW, India 250MW and Germany, the Netherlands, the United Kingdom, and Korea co-financing 100MW or a bit more each.

Countries like Norway, France, and the United States also invested in solar power projects with capacities of only 50MW each.

The second tender invited proposals for building 10 solar power plants with 50MW capacity each in seven locations. The tender will expire on March 10.

Proposals for constructing 19 power plants with capacities ranging between 70MW and 100MW in 13 specific locations were floated on January 27 with a deadline of March 31.

‘All tender deadlines are likely to be extended, by up to three weeks,’ said Golam Mortuza, the BPDB official in charge of taking care of the tenders.

He said that the eligibility criteria would be relaxed to make the bidding even more competitive.

Despite making announcements about providing land and a transmission network to facilitate future renewable energy projects, the interim government has come up with no such measures in the ongoing bidding.

The locations specified in the tenders refer to sub-stations from where the BPDB will receive electricity supply from the solar power plants to be built, the PDB official said.

There are at least seven potential AL-era investors who have land near the locations mentioned in the last tender. PDB officials said that these AL-linked investors were likely to get the solar projects.

Bangladesh’s current installed power generation capacity is 27,884.7MW. Of the capacity, renewable energy accounts for only over 993MW.

Except for a wind and a hydroelectric plant, there are 14 solar power plants currently in operation, 11 of them owned by private companies known as AL favourites. The biggest solar power plant is of 200MW.

‘The ongoing bidding is likely to favour AL favourites in many ways,’ said Bangladesh Working Group on Ecology and Development member secretary Hasan Mehedi.

‘Bangladesh’s energy transition has never been so uncertain,’ he said.​

 

[Saif]

Energy division seeks Tk 22.25b for dev projects

The energy division has requested the government to earmark Tk 22.25 billion in the next fiscal year for drilling wells to enhance gas and oil production, conducting seismic surveys, and exploring mineral resources, officials have said. Energy and Mineral Resources Division Secretary Mohammad Sa

thefinancialexpress.com.bd

Energy division seeks Tk 22.25b for dev projects
Fund sought for dev projects in FY26, Finance Division scrutinising proposal
FE REPORT
Published :
Mar 01, 2025 00:40
Updated :
Mar 01, 2025 00:40

The energy division has requested the government to earmark Tk 22.25 billion in the next fiscal year for drilling wells to enhance gas and oil production, conducting seismic surveys, and exploring mineral resources, officials have said.

Energy and Mineral Resources Division Secretary Mohammad Saiful Islam in a recent letter to Finance Secretary Dr Md Khairuzzaman Mozumder made the plea.

Finance Division officials say they are now scrutinising the proposal based on the necessity of the projects.

A senior official of the division told The Financial Express, "The government is now facing a severe shortage of development funds. Allocating additional funds in the next fiscal year will be very tough."

In the fiscal year 2025-26, the energy division secretary sought an allocation of Tk 3.0 billion to install ERL unit-2, Tk 2.0 billion to construct the Bhola-Barishal-Khulna gas pipeline, Tk 1.0 billion to dig wells in five areas of Bhola district, and Tk 2.0 billion to conduct 3D seismic surveys in Charfesson, Monpura, and Hatia upazilas.

He also sought Tk 1.0 billion for capacity enhancement of well digging and seismic survey of Bangladesh Petroleum Exploration and Production Company Limited (BAPEX), Tk 6.0 billion to procure a new rig, Tk 1.0 billion to increase the capacity of Geological Survey of Bangladesh and implement seven more projects, Tk 500 million for capacity building and setting up new lab for the Department of Explosives, and Tk 500 million for enhancement of training capacity and constructing building for Bangladesh Petroleum Institute.

According to officials of the division, four projects got approval of the Executive Committee of the National Economic Council (ECNEC) in the fiscal year 2024-25.

Under one of those, the energy division will require Tk 100 million to make procurements and set up a gas processing plant with a capacity of 60 million standard cubic feet per day (MMSCFD).

Another approved project for 2D seismic surveys to explore blocks 7 and 9 will require Tk 200 million.

Moreover, the drilling of Rashidpur-11 well will require Tk 500 million, while some Tk 1.20 billion will be needed to dig Dupitila-1 and Kailashtila-9.

Finance Division officials say two more projects are awaiting ECNEC approval in the current fiscal year. One of those involves conducting 3D seismic surveys in Habiganj, Bakhrabad, and Meghna fields and will require Tk 750 million, while Tk 2.50 billion will be needed to dig two wells in Titas and Bakhrabad fields.​