Transforming the power sector in Bangladesh

Bangladesh is one of the fastest growing economies in South Asia. Over the past decade, Bangladesh’s economy has grown at an annual rate of around 6% which is better than the growth rate of many other Asian economies. The Government of Bangladesh now aims to achieve the status of a ‘middle-income country’ by 2021 and that of a ‘high-income country’ by 2041. It is well known that electricity plays a vital role in poverty eradication, sustained economic growth, infrastructure development and security of any country. Thus, Bangladesh will need to address the barriers to higher growth posed by low access to reliable and affordable power, limited availability of serviced land, rapid urbanisation, vulnerability to climate change and natural disasters, etc., to achieve its socioeconomic growth targets. 

This report provides our views on the megatrends in the global power sector and how they will impact Bangladesh in its power sector transformation journey. It is important for stakeholders (the government, regulators, utilities, investors and development partners) to assess their strategy and implement the changes they need to make in time or, even better, ahead of time. The report provides suggested actions for Bangladesh on thematic areas such as government and regulations, financing and investments, renewable energy, and technology in which disruptions are impacting the country’s power sector. 

Power sector in Bangladesh

Key areas of intervention

Government and regulations

The government of Bangladesh is envisaging further reform measures in power sector to meet the increasing demand for reliable, affordable and sustainable power. Some of the key actions required include facilitating the development of a competitive power market, rationalising tariff and reforming subsidy arrangement.

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Financing and investments

Bangladesh will require an investment of about 35 billion USD by 2041 in the power sector. Given the scale of funding requirement, Bangladesh may need to explore alternative financing modalities such as overseas listing, issue of local currency denominated bonds in overseas market, strategic disinvestment of power utilities, green funds, power sector focused financial institution set-up and increasing private participation.

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Renewable energy and energy efficiency

While the government of Bangladesh has demonstrated initiatives to keep pace with the rising energy supply gap and is addressing the same with policy instruments, Energy Efficiency and Conservation (EEC) is still largely driven by a voluntary approach from the end-users. The existing policies and regulations by policymakers and regulators may be supplemented by promoting incentive-driven demand side management among various classes of consumers.

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Technology enablement

Information and operational technologies are expected to play a critical role in Bangladesh’s power sector. Few global trends that should be adopted in Bangladesh are technological advancement towards enhanced consumer services, adoption of smart grid technologies, advanced technologies like digital asset management and drone powered solutions, and cyber security.

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Capacity building

Significant skill upgradation and capacity building of the new age work force is required in Bangladesh to enable successful transformation in generation mix and advancement in technological interventions.

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  • “The power sector has a vital role in poverty eradication, economic growth and sustainable infrastructure development. Globally and in Bangladesh, power markets are currently undergoing disruptive transformation. It is important for all sector stakeholders in Bangladesh to assess strategic options and implement needed changes in time or ahead of time.”
    Yogesh Daruka
    Partner, Power and Utilities
    PwC India
  • “Bangladesh’s power sector is one of the fastest growing in the South Asian region. The sector will play an important role in helping the country achieve its socio-economic growth targets. However, there are constraints stemming from low energy access, rapid urbanisation, vulnerability to climate change & natural disasters and limited availability of land, which need to be addressed by the policymakers and other stakeholders. ”
    Mamun Rashid
    Managing Partner,
    PwC Bangladesh

Contact us

Mamun Rashid

Managing Partner, PwC Bangladesh

Tel: +880 961 200 4001

Yogesh Daruka

Partner, Power and Utilities, PwC India

Tel: +91 33 4404 4288

Amit Kumar

Partner, Clean Energy, PwC India

Tel: +91 124 330 6413

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