Import reliance, sectoral debt and LNG spending threaten energy security: CPD
CPD says the sector is facing multiple pressures, including a debt burden of Tk20,000 crore that must be repaid, stagnant production capacity, and a continued reliance on imported fuel.
Import dependency in the power and energy sector is increasing, the Centre for Policy Dialogue (CPD) said today (10 January), warning that this trend poses significant risks for long-term energy security.
The observation came during CPD's independent review of the state of the Bangladesh economy for the first half of FY2025–26, presented at a press conference in Dhaka.
CPD noted that the sector is facing multiple pressures, including a debt burden of Tk20,000 crore that must be repaid, stagnant production capacity, and a continued reliance on imported fuel.
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According to the organisation, the overall energy mix remains unchanged, while dependency on imported LNG is rising sharply.
It said Tk58,000 crore is expected to be spent on LNG imports alone, a situation CPD described as a matter of grave concern for energy security.
The independent think tank pointed out that transmission lines have increased by 12.5% and distribution lines by 1.25%, with some growth in renewable-based generation.
However, it said progress in renewables remains limited and inconsistent.
Coal use has increased by 3% over the past one and a half years, which CPD flagged as concerning at a time when the interim government has committed to a zero-carbon path.
CPD noted that 34 cancelled solar power projects have weakened investor confidence, and that implementation processes remain slow and complex, preventing expected benefits from materialising.
The organisation also stressed the need to strengthen institutional capacity, saying agencies such as Sustainable And Renewable Energy Development Authority and Bangladesh Petroleum Corporation continue to operate with limited effectiveness.
CPD recommended reducing dependency on LNG imports, shutting down inefficient old power plants, and phasing out tax exemptions on fossil fuels.
It said such incentives should instead be directed towards renewable energy.
According to the organisation, these measures are achievable within the first 100 days of the new government after the election next month.
Addressing the risks of rising coal-based electricity use, CPD Distinguished Fellow Professor Mustafizur Rahman warned that Bangladesh's readymade garment sector relies on electricity generated from coal plants, which could trigger carbon-related penalties under export conditions.
He said higher coal use may create obstacles for Bangladeshi products entering international markets, beginning with the European Union and potentially extending to other destinations.
As a result, the growing dependence on coal poses a significant risk to the economy.
