The government has outlined an extensive strategy to strengthen Bangladesh’s power and energy sector, with a focus on ensuring reliable electricity supply, enhancing energy security and reducing dependence on imported fuels.
According to the proposed national budget for fiscal year 2026-27, the power and energy sector has been identified as one of the country’s top development priorities. An allocation of Tk17,345 crore has been proposed for the sector, representing 1.85 per cent of the total budget.
The plan seeks to create a more self-sufficient and sustainable energy system through increased domestic exploration of gas and oil resources, expansion of renewable energy generation and continued investment in transmission and distribution infrastructure.
The budget document notes that weaknesses in previous energy policies, including corruption, mismanagement and reliance on costly capacity payments, significantly increased government expenditure in the sector. It says power subsidies are expected to exceed Tk40,000 crore during the current fiscal year.
To address these challenges, the government has set ambitious renewable energy targets. The aim is to generate 20 per cent of electricity from renewable sources by 2030 and between 30 and 50 per cent by 2050. Planned initiatives include rooftop solar expansion, large-scale solar projects, coastal wind resource assessments, waste-to-energy facilities and implementation of energy storage solutions.
Energy efficiency has also been prioritised. The government plans to strengthen industrial energy audits and promote energy-saving appliances. Tax incentives have been proposed for the solar sector, including a zero percent tax rate until 2035 and a five per cent rebate on solar electricity bills.
The strategy further includes increasing national power generation capacity to 35,000 megawatts by 2030. During the next fiscal year, 1,839 MW of new generation capacity is expected to be added, alongside the construction and modernisation of more than 9,000 kilometres of distribution lines and 900 circuit kilometres of transmission lines.
Work on the Rooppur Nuclear Power Plant is also being accelerated, with plans to add 300 MW to the national grid by August and 1,200 MW by January next year.
On the energy exploration front, the government has launched a new offshore bidding round and revised production-sharing contracts to attract international investors. Exploration activities led by Bangladesh Petroleum Exploration and Production Company Limited will include seismic surveys, well drilling and the acquisition of new drilling rigs.
The plan also aims to expand domestic coal and mineral production while introducing policy measures to support local industries and maintain affordable electricity prices over the long term.
