The promise and pitfalls of Bangladesh’s PPP journey

Bangladesh is at a crossroads. On 24 August 2025, the partial opening of the Dhaka Bypass Expressway marked another milestone in the country's trajectory of Public–Private Partnerships (PPP). An 18km section is already easing congestion between Gazipur and Madanpur, while the full 48km route, due for completion in June 2026, promises to transform connectivity around greater Dhaka.

This is not an isolated achievement. The Dhaka Elevated Expressway, now operational from the Airport to Moghbazar, is the country's first elevated highway and the first transport PPP with foreign investment. Another major project, the Dhaka–Ashulia Elevated Expressway, is also under construction. Together, these demonstrate how PPPs can deliver complex, capital-intensive projects that the government alone could not easily finance.

Yet these successes are only the beginning. Bangladesh needs to invest an estimated $10–12 billion annually in infrastructure. Public finance alone will not suffice. Aid flows are shrinking as the country graduates from LDC status, while subsidies and debt already strain the budget. The solution is clear—PPP is not a choice but a necessity.

Bangladesh's formal PPP journey began in 2010 with the establishment of the PPP Authority under the Prime Minister's Office. That same year, the Quick Enhancement of Electricity and Energy Supply Act opened the door for Independent Power Producers. While this model boosted power generation, it was also criticised for high costs, weak transparency, and corruption risks, before being repealed in 2024.

From my own experience, I have seen both the potential and the difficulties of PPPs. At the Economic Zones Authority and later during my posting in Kaliganj, I worked on projects that showed how success depends not just on finance but also on governance, community engagement, and day-to-day problem-solving. Training and workshops with BEZA, the PPP Authority, and international partners further shaped my understanding and reinforced my belief that strong partnerships are vital to meeting Bangladesh's infrastructure needs.

The case for PPP has never been stronger. Debt and subsidies weigh heavily on the budget, foreign aid is shrinking, and demand for modern transport systems, ports, and renewable power is accelerating. PPP provides a way to mobilise private capital, deliver projects more efficiently, transfer advanced technologies, and align with sustainability commitments such as SDG 7. In short, PPP is not only about building roads and bridges; it is about shaping the economic future of Bangladesh.

The institutional foundation is already in place. Bangladesh has a PPP pipeline of more than 80 projects worth over $30 billion across energy, transport, ports, healthcare, and ICT. Notable examples include the Dhaka Elevated Expressway, Payra Port development, and solar IPPs. Yet many projects are delayed or struggle to reach financial closure because of weak feasibility studies, land acquisition bottlenecks, unclear risk-sharing, and limited private sector confidence. The challenge lies not in policy intent but in execution.

Other countries offer valuable lessons. Australia has become a global leader, delivering successful PPPs in transport such as Sydney Metro and Melbourne CityLink, as well as in social infrastructure, including schools and hospitals. India has built world-class airports and solar parks through PPP. 

Vietnam has expanded highways and power plants by adopting clear risk-sharing frameworks. China has built one of the largest PPP portfolios in the world. The United Kingdom pioneered the Private Finance Initiative in the 1990s, using PPP to deliver hospitals, schools, and transport networks. The common thread is clear—well-structured PPPs attract investment, bring technology, and ensure efficiency.

Bangladesh must address its structural weaknesses to achieve similar outcomes. Project preparation, appraisal, and feasibility studies need to be more rigorous. Risk-sharing arrangements must be balanced to make projects bankable. Land acquisition must be streamlined. Domestic capital markets must be developed to support long-term project financing. And both public agencies and private developers must invest in technical expertise. Unless these hurdles are addressed, investor confidence will remain fragile.

The way forward is equally clear. Bangladesh must prioritise projects with strong demand and national importance, adopt standardised contracts and transparent procurement, and expand PPPs into renewables such as floating solar, offshore wind, and waste-to-energy. Innovative financing tools, from project bonds to blended finance, should be introduced. 

Meanwhile, local industries should be supported through incentives for turbine assembly, solar panel manufacturing, and supply chain integration. Regional cooperation should be deepened by learning from the successes of India, Vietnam, China, and Australia.

Institutions like the Infrastructure Investment Facilitation Company must also be strengthened. Its mission to promote and facilitate PPP projects positions it as a vital partner for structuring deals, building capacity, and boosting investor confidence. When private partners assume management responsibility and long-term risks, it ensures value for money for the public sector.

The legal foundation already exists, with the PPP Law of 2015, the G2G Partnership Policy of 2017, and the Procurement Guidelines of 2018 in place. What Bangladesh needs now is discipline in execution and transparency in process. If done right, PPPs can mobilise billions in private capital, deliver infrastructure faster, and bring the skills and technologies that a competitive economy requires.

The path ahead is clear. Either Bangladesh continues to overburden public finances, or it embraces PPPs that unite government oversight with private expertise and capital. If the nation is serious about reaching upper-middle-income status, it must be paved through strong and effective partnerships. 

Md Azizur Rahman is a Certified PPP Professional (CP3P) and Senior Assistant Chief at the  Bangladesh Planning Commission.

Disclaimer: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinions and views of The Business Standard.