The International Monetary Fund (IMF) has called on Bangladesh to overhaul its electricity subsidy regime, warning that the current structure disproportionately benefits wealthier households at the expense of the poor.

In a draft technical assistance report submitted to the Power Division on June 30, the IMF flagged significant inefficiencies in electricity pricing and urged both short- and long-term reforms to reduce fiscal pressure and improve subsidy targeting.

Bangladesh stands at a critical juncture in its development journey, where energy, equity, and environment intersect in profound ways. As the country aspires to become a prosperous, climate-resilient nation by 2041, it faces the dual challenge of sustaining economic growth while responding to the escalating climate crisis. Central to this transition is the need to reform the energy sector in a way that is just, inclusive, and people-centred. A just energy transition is not merely about replacing fossil fuels with renewables; it is about transforming the energy system to serve all citizens equitably, create decent livelihoods, and uphold environmental sustainability.

The government has announced that it has initiated a review of contracts with Independent Power Producers (IPPs) to eliminate “capacity payment” clauses—provisions that obligate the government to pay for power generation capacity even when no electricity is actually supplied to the grid.

The move was disclosed on Friday through the verified Facebook page of the Chief Adviser to the interim government.

On 16 June 2025, Bangladesh unveiled its Renewable Energy Policy 2025, outlining an ambitious goal: to meet 20 per cent of the country’s energy needs from renewable sources by 2030, and 30 per cent by 2040. Seventeen years after the first Renewable Energy Policy in 2008, this new policy is not just an update; it’s a response to years of missed targets and stagnation.

Study also shows investment requirement to rise to $1.4b by 2040

Bangladesh needs to expand its renewable energy capacity by 21 percent annually to meet its latest green energy target by 2030, requiring nearly $1 billion in yearly investment, according to a study by the Institute for Energy Economics and Financial Analysis (IEEFA).

While much of the world is already reaping the rewards of renewable energy, Bangladesh has woefully fallen behind

That few countries are as exposed to the ravages of climate change as Bangladesh is an incontrovertible statement -- it is an immediate existential threat for which we as a nation have to take every possible measure to build a bulwark against.

As climate change accelerates and the global energy landscape undergoes rapid transformation, countries like Bangladesh face a pivotal moment. Long reliant on imported fossil fuels, Bangladesh is at a crossroads-should it continue investing in coal, LNG, and oil to power its growth, or seize the opportunity to transition to a cleaner, more resilient energy system? The answer, though complex, reveals that while Bangladesh has taken early steps toward energy transition, its overall readiness remains mixed and uneven. A closer look at the country's policy landscape, institutional structures, financing models, and technological capacity paints a sobering but hopeful picture.

This round had three deadline extensions

The government's aim to scale up solar energy has once again met with tepid investor interest as the third round of tenders for grid-tied solar power plants closed with poor participation and several projects failing to draw any bids.

US airstrikes in Iran have triggered a surge in global oil prices, spelling trouble for nations reliant on energy imports. Bangladesh braces for the fallout — from inflation and forex pressure to rising subsidies and a renewed energy crisis

Global oil markets were rattled over the weekend following US airstrikes on Iranian nuclear sites — a move that could escalate tensions in the already fragile Middle East and potentially upend global energy flows.

Adani Power Ltd has yet to resolve its ongoing coal tariff dispute with the Bangladesh Power Development Board (BPDB), a disagreement that directly affects the per-kilowatt-hour cost of electricity from the 1,600MW Jharkhand power plant.

The impasse continued during a virtual meeting held on Monday between BPDB officials and a delegation appointed by Adani’s CEO.

Though price of oil in the global market has not so far gone through the roof since Israel's June 13 attack on Iran followed by the latter's retaliatory missile and drone strikes, there is no guarantee that it will remain so in the coming days. It's already unstable. Overall, the price of crude oil rose by 4.0 per cent over the week. But in case, the conflict spirals out of control and Iran blocks the Strait of Hormuz, it is hard to say where it would finally end up. If the US enters the scene and starts a bombing campaign on Iran to what it says destroy Iran's nuclear facilities and Iran blocks the Strait of Hormuz in retaliation, the oil price may even shoot up to US$150 a barrel, some experts fear. In that case, countries that depend completely on imported energy including oil and Liquefied Natural Gas (LNG) are going to be at the receiving end.

Though price of oil in the global market has not so far gone through the roof since Israel's June 13 attack on Iran followed by the latter's retaliatory missile and drone strikes, there is no guarantee that it will remain so in the coming days. It's already unstable. Overall, the price of crude oil rose by 4.0 per cent over the week. But in case, the conflict spirals out of control and Iran blocks the Strait of Hormuz, it is hard to say where it would finally end up.

Bangladesh has slowly been steering towards a sustainable and energy-efficient future. Chief Adviser Professor Muhammad Yunus has already called world leaders to build a 'World of Three Zeros', meaning zero poverty, zero unemployment, and zero net carbon emissions. He also added that people's lifestyles should be based on zero-carbon; thus, there is no fossil fuel but only renewable energy. To accelerate the goal towards zero net carbon emissions, we must realise the full potential of the EV (Electric Vehicle) industry, which can promise far-reaching benefits from decreasing dependency on fossil fuels, reducing greenhouse gas emissions, and enhancing public health.

BANGLADESH stands at a historic crossroads. As the nation experiences rising energy demands driven by urbanisation, industrialisation and demographic growth, its energy planning decisions will shape the trajectory of development, environmental sustainability and climate resilience for generations to come. Against this backdrop, the government unveiled the Integrated Energy and Power Master Plan, IEPMP, 2023, a long-term strategic framework designed with support from the Japan International Cooperation Agency. While the plan was conceived with the intent of creating an efficient, affordable and sustainable energy future, it has been met with significant criticism. From civil society organisations to academics and energy experts, the consensus is clear: the IEPMP 2023 falls far short of the vision Bangladesh needs for a just, inclusive and climate-aligned energy transition.

Decade after decade, Bangladesh's promising renewable energy (RE) sector remains stagnant due to the absence of a well-structured national policy, an investment-friendly environment and skilled leadership. Meanwhile, the country, struggling with a weak economy, has become highly dependent on costly fossil fuel imports, imposing a heavy financial burden on the lower and middle income people.