45 Billion Taka Electricity Debt Sparks Crisis

Bangladesh’s newly formed government is confronting a formidable challenge in the power sector, inheriting substantial debts owed to both domestic and foreign companies. With the summer irrigation season approaching after Ramadan, authorities face heightened concerns over maintaining uninterrupted electricity supply amid these financial constraints.

Currently, national electricity demand hovers around 13,000 megawatts, while the Power Division estimates peak demand could rise to 18,000 megawatts during the hottest months of the year. Newly appointed Minister for Power and Energy Iqbal Hasan Mahmud has indicated that fulfilling this demand will require operating gas, coal, and oil-fired power plants. He described the situation as necessitating “disaster management” to stabilise supply.

The sector is burdened with chronic arrears and a lack of sufficient fuel supply, complicating operational planning. “Electricity is totally financially bankrupt… many debts, many dues. Fuel is insufficient and must be imported. The situation is very complicated,” Minister Mahmud told BBC Bangla.

Experts have warned that decisions must carefully weigh multiple factors, including the impact of energy imports on foreign currency reserves. Energy analyst Dr Ijaz Hossain noted that historical trends suggest severe load-shedding during peak summer if these issues are not addressed promptly.

As of January 2026, Bangladesh had 136 government and private power plants with a combined installed capacity of 28,919 megawatts. The country has approximately 49.4 million electricity consumers, and the highest recorded daily generation was 16,794 megawatts on 23 July 2025.

According to the Bangladesh Power Development Board (BPDB), the power sector owed 45,000 crore taka as of February 2026, with private oil-fired companies accounting for 14,000 crore taka of unpaid bills. Many of these private operators have not received payments for seven to eight months.

BPDB Chairman Md Rezaul Karim stated that arrears have accumulated cumulatively over time, with subsidies from the government often insufficient to cover the shortfall. While the caretaker government temporarily reduced debts in early 2025, no payments have been made since July 2025, raising concerns about the impact on electricity generation during peak summer months.

Energy specialists warn that delays in settling payments could hinder fuel importation, particularly oil. Most private companies import their own fuel, which can take 40–45 days from LC issuance to delivery, and net reserves have already fallen from over 100,000 metric tonnes in January to 80,000 tonnes by mid-February.

Coal-fired plants, which currently operate at only 45% of their potential, could mitigate some dependency on oil if imported coal is used efficiently. However, complete reliance on coal is not feasible, as peak electricity demand and industrial gas supply will still require oil-fired generation.

Dr Ijaz Hossain estimates that around USD 13–15 billion would be required for full energy imports, with total capacity payments and fuel costs pushing the sector’s needs closer to USD 25 billion. He suggests that a combination of government subsidies, foreign aid, and direct investments will be essential to stabilise the system.

Meanwhile, Cab energy advisor Dr M Shamsul Alam emphasised that corruption and mismanagement have exacerbated the crisis. “Closing inefficient oil-fired plants and utilising coal effectively could save 28–30,000 crore taka,” he noted.

Minister Mahmud confirmed that immediate priorities include ensuring uninterrupted electricity supply during Ramadan and summer irrigation, while long-term strategies will follow once emergency measures are in place.