Bangladesh Power Sector's Financial Woes Exposed by Energy Crisis

Bangladesh is facing an electricity crisis, with power cuts of up to 6 hours per day in some areas. The government has blamed a fire at Moheshkhali and a liquid fuel shortage for the problem, but experts say there's more to it.

The country's power sector has been plagued by debt and inefficiency, with installed capacity nearly double what is needed. The Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act in 2010 led to an increase in installed capacity from 6,300 MW to 29,593 MW.

Gas-based generation capacity decreased from 83% to 42%, while coal-based and HFO-based capacities increased. The country now relies heavily on imported energy, with a quarter of its natural gas coming from liquefied natural gas (LNG) imports.

The shortage of primary fuel has limited electricity generation, but it's not the only reason for the crisis. The power sector's financial health is another major contributor to the problem, with excessive capacity payments and purchases of expensive LNG from the spot market.

As of June 2026, Bangladesh Power Development Board (BPDB) owes around BDT 440 billion to private facilities, joint ventures, and foreign power exporters. The sector's vulnerability has been exposed by the recent energy crisis, highlighting the need for a more sustainable approach to energy development.