The government has allocated Tk 22,520 crore for the power and energy sector in the proposed national budget for the fiscal year 2025–2026—down by Tk 7,796 crore from Tk
30,316 crore of the previous fiscal year.
Finance Adviser Dr. Salehuddin Ahmed in his budget speech on Monday said that the government has, in principle, decided not to increase electricity prices for the time being in view of the prevailing high inflation.
“At present, the subsidy provided to the power sector is around 1 percent of GDP, which is quite high. To gradually reduce this burden, a plan has been undertaken to cut overall power generation costs by 10 percent. If successful, this could save more than Tk 11,000 crore in electricity subsidies,” he said.
Dr. Salehuddin also laid importance of ensuring adequate energy supply and keeping it affordable to improve citizens’ quality of life and support the economic growth.
To reduce generation costs, the government is reviewing power purchase agreements and has initiated energy audits.
A target has been set to supply 648 million cubic feet of gas
from domestic sources within this year, with an additional 1,500mcft
to be extracted from local wells by 2028.
To support these goals, more emphasis has been placed on strengthening the capacity of state-owned gas exploration company Bangladesh Petroleum Exploration and Production Company Limited (BAPEX), with necessary budgetary allocations provided.
To raise energy security, the government is also advancing domestic oil and gas exploration and production. Between FY2025–26 and FY2027–28, BAPEX plans to carry out a 270 km geological survey, a 700 km 2D seismic survey, and a 700 sq km 3D seismic survey. In the medium term, BAPEX aims to drill 69 wells and perform workovers on 31 wells by using its own rigs.
In a move to ensure transparency and accountability in the power sector, the finance adviser said the government has repealed the ‘Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act, 2010’.
A national committee has been formed to review agreements previously executed under the Act and to provide recommendations. Besides, a separate committee has been formed to review and renegotiate the tariff structures of power purchase deals.
As part of efforts to modernise power distribution, work is underway to install underground distribution lines and substations in metropolitan areas. “This initiative will enhance the stability and efficiency of the power distribution system,” the finance adviser said.
Under sub-regional cooperation, an agreement was signed with Nepal on October 3, 2024, to import 40 MW of hydropower at affordable rates to meet peak summer demand.
Work on the 2,400 MW Rooppur Nuclear Power Plant is in progress, with expectations to begin supplying electricity to the national grid by December this year.
Work on the 2,400 MW Rooppur Nuclear Power Plant is in progress. The mega power plant is expected to start electricity supply to the national grid by December this year.
Dr. Salehuddin also said that the government is finalising a new Renewable Energy Policy to update the 2008 version. Under the revised policy, the goal is for 30 percent of the country’s electricity to come from renewable sources by 2040. An Integrated Power Sector Master Plan has also been prepared with a target to produce 3,400 MW electricity from clean sources by 2028.
