Environment and Forest Adviser Syeda Rizwana Hasan on Wednesday said a significant financial burden is associated with the cancellation of power sector contracts though it may seem straightforward.

She, however, said the interim government is currently reviewing such contracts to identify and rectify any irregularities despite the challenge, citing the Niko contract, which took the country to an international court due to the cancellation.

Rizwana Hasan made the remarks while inaugurating the three-day Bangladesh Energy Prosperity 2050 conference at the BIAM Foundation.

She emphasised that many contracts signed by the previous government were controversial from the very start. “For the projects that were implemented, the burden of loans and instalment payments still remains. The government continues to bear the cost of these expensive contracts while managing the pressure for energy transformation and the need for damage control."

Prof Dr M Tamim of Bangladesh University of Engineering and Technology highlighted the financial realities of cancelling contracts, stating that penalties to the tune of $8 billion to $12 billion are associated with shutting down projects.

He also noted that there are power plants with a total capacity of 7,000 MW in operation while capacity charges are being paid to power plants having a capacity of 6,000MW though they remain idle.

Tamim stressed the need for careful planning to move forward with the energy sector transformation, including focusing on skill development and cost-saving measures.

Bangladesh's move towards a sustainable power policy Energy Adviser Muhammad Fouzul Kabir Khan, the conference's chief guest, criticised the previous government's approach to the power and energy sector, suggesting that it was more focused on enabling corruption than achieving sustainable development.

He reaffirmed the current government's commitment to promoting renewable energy and restoring the Bangladesh Energy Regulatory Commission's authority to fix electricity tariffs.

The adviser also mentioned that the government is revising the Integrated Energy and Power Master Plan and reevaluating the renewable energy policy.

Rizwana Hasan, who chaired the inaugural session, pointed out that Bangladesh faces significant challenges in achieving energy prosperity due to unequal power deals and energy access issues.

She emphasised clear policies, private-sector engagement and efforts to meet the 40% renewable energy target by 2041.

Cynan Houghton, deputy regional programme director at the Tara Climate Foundation, stressed that a collective effort is needed to drive a renewable energy transition in Bangladesh.

He pointed to the success of countries like Vietnam, South Africa, Pakistan and China that achieved extraordinary progress in the energy sector despite challenges. These transformations, he noted, took months, not years and demonstrate what is possible with commitment and cooperation.

Lidy Nacpil, coordinator of the Asian Peoples’ Movement on Debt and Development, stated that the greater challenge lies in transforming the fossil fuel-based economic system.

She noted that many countries share the common struggle of transforming their energy systems.

Hasan Mehedi, member secretary of Bangladesh Working Group on Ecology and Development, welcomed the high-level panellists, delegates and participants, focusing on achieving net-zero emissions by 2050.

The conference, which has brought together over 300 national and international representatives, is centred on achieving a sustainable energy future through policy coherence, institutional reform, financial mechanisms and international cooperation.

It focuses on five key themes -- Policy Coherence, Institutional Reform, Financial Mechanisms, Bilateral & Multilateral Cooperation, and Social and Environmental Considerations.

News Link: Cancelling power deals to drain treasury: Rizwana