Experts warn Bangladesh may face major power crisis

Industry experts and business leaders have warned that the next government could face a severe power crisis unless immediate steps are taken to stabilise the sector and restore investor confidence.

The warning came at a policy dialogue titled "Powering Prosperity: Creating a Stable and Bankable Energy Future for Bangladesh"in the capital on Wednesday, UNB reports.

Policy Exchange and the Economic Reporters' Forum (ERF) jointly organised the event.

Speakers expressed concern over frequent policy changes after each change of government, saying such instability continues to deter foreign investment.

They stressed the need for a long-term, bipartisan energy policy to ensure sustainable financing in the power and energy sector.

Prof M Tamim, Vice-Chancellor of Independent University Bangladesh, said the absence of realistic and demand-based planning could leave the next government grappling with a 'grave energy crisis.' Criticising the current renewable energy expansion plan, he described it as 'bureaucratic ambition without proper groundwork.

He called for accelerating domestic gas exploration through experienced international companies noting BAPEX's capacity limitations.

Bangladesh Energy Regulatory Commission (BERC) Chairman Jalal Ahmed attended the event as the chief guest.

Other participants included Korean Ambassador Park Young-sik; BNP Vice Chairman Abdul Awal Mintoo; Jamaat-e-Islami Shura Council member Dr Mobarak Hossain; BNP Adviser Dr Mahdi Amin; BGMEA President Mahmud Hasan Khan; MCCI President Kamran T Rahman; BIDA Director General Md Arif Hossain and representatives from Bangladesh Bank, EBL, IDCOL, and Confidence Power Rangpur Ltd.

The speakers said despite significant expansion-growing from 3,500 MW in 2009 to 28,359 MW in September 2025-structural weaknesses threaten to stall future progress.

In a presentation, Abu Chowdhury, Director of EMA Power Investment, warned of a looming supply-demand imbalance if new investments slow down.

The total capacity is expected to peak at around 35,000 MW in 2029 before dropping to approximately 30,000 MW between 2035 and 2040 due to plant retirements, reduced gas availability and limited new projects, said the speakers.

With demand rising at 6 percent annually, it may exceed available capacity by 2033, reaching nearly 40,900 MW by 2040, they said.
Speakers said the perception of overcapacity is misleading as effective generation will fall below peak demand after 2032.

By 2040, demand is projected at 35,550 MW against effective generation of about 20,901 MW, leaving a potential deficit of nearly 14,650 MW.
Panelists identified several challenges undermining the sector and discouraging private capital, which currently accounts for about 48 percent of installed capacity.

Experts said Bangladesh's heavy reliance on natural gas-currently 43 percent of power generation-will shift sharply as gas supplies decline.
By 2033-35, Heavy Fuel Oil (HFO) is projected to become the dominant fuel source, accounting for 33-45 percent of generation.
They emphasised that without policy adjustments, clean energy goals will be difficult to achieve.

The experts recommended expanding gas and renewable energy production while improving efficiency across the system, ensuring policy continuity to attract long-term financing, addressing delays and reversals that are jeopardising Bangladesh's renewable targets-20 percent by 2030 and 30 percent by 2041.

The event was attended by senior officials from finance, industry and the private sector, including representatives from BGMEA, MCCI, BIDA and Standard Chartered Bank Bangladesh.