Bangladesh’s power sector needs $35 billion investment


Aiming to provide cheap and reliable power supply to its people, Bangladesh needs an investment of about USD 35 billion by 2041. The government is also contemplating deregulation of the power sector to allow entry of private players to achieve its goals.

This was revealed in a report “Transforming the Power Sector in Bangladesh” released by State Minister for Power, Energy and Mineral Resources, Government of Bangladesh, Nasrul Hamid during the Bangladesh Power Conclave 2018. The report also emphasized that Bangladesh needs to explore other sources of financing beyond the existing ones.

Bangladesh, one of the most densely populated country is struggling to provide access to power to all its citizens. The government is looking at deregulation of the power sector to achieve this goal. State Minister for Power, Energy and Mineral Hamid, said: “The Government thinks that deregulation is the future. Private sector participation in transmission and distribution will bring investment and better service in this sector.” Treading the path carefully the government will allow private sector partnership in transmission first as a test case.

Bangladesh’s installed capacity has increased remarkably in the past 10 years, from 4.5 gigawatt (GW) to 12.8 GW. According to the report, augmenting the existing electricity infrastructure of the country and an increased focus on the industrial sector could further help the country in the successful transformation of the sector.

Mamun Rashid Partner of PwC Bangladesh said: “Bangladesh’s power sector is one of the fastest growing in the South Asian region. The sector will play an important role in helping the country achieve its socio-economic goals. However, there are constraints stemming from low energy access, rapid urbanisation, vulnerability to climate change and natural disasters and limited availability of land.”

Speaking on the sector, Latif Khan, President, BIPPA and Vice Chairman of Summit Group expressed concerns among the private players regarding the proposed deregulation. “There are certain issues concerning regulation, financing and technology prevalent in the private power generation sector today. Bangladesh’s power industry today needs to address these to attain our shared goal of implementing the Private Sector Power Generation Policy (PSPGP) and Power System Master Plan (2016),” Khan elaborated.

Yogesh Daruka, partner – Power & Utilities, PwC India also applauded the Government’s “aggressive efforts” for the development in the sector.

The country would be needing “significant skill upgrade and capacity building of the workforce” as it looks forward to sustainaible growth of the power sector. “This is in addition to new generating sources, a changing generation mix, increased operational efficiency,” the report added.