Why do the World Bank and ADB want rural electricity to become a business?
As internal strife between the BREB and PBS deepens, the government appears more interested in satisfying donor-driven reform agendas than addressing the root causes, threatening to commercialise rural electricity at the cost of public welfare
The internal conflict between the Bangladesh Rural Electrification Board (BREB) and the Palli Bidyut Samiti (PBS) has been ongoing for a long time. Allegations of corruption and mismanagement have fueled mutual accusations and instability, which the government appears to have failed to resolve. Meanwhile, instead of addressing the root causes, the government seems to be furthering the World Bank-ADB agenda, according to the Consumers Association of Bangladesh (CAB), which, on 4 June, held a press conference demanding the implementation of its recommendations to resolve the BREB-PBS conflict.
Since 2010, the ADB and the World Bank have been pushing for the privatisation of rural electrification, but the then energy advisor to the Prime Minister, Dr Tawfiq-e-Elahi Chowdhury, failed to implement these directives. The current advisor may now be bearing the burden of that unfulfilled agenda. CAB had investigated at the time it escalated. Although the first part of the investigation report was submitted to the government on 10 October 2024, CAB suspended the second part concerning corruption allegations due to a lack of cooperation from the Power Division. CAB's report included five key recommendations:
- Due to different service rules, PBS staff are effectively subordinate to BREB, leading to inequality and conflict. CAB recommends unifying service rules, promotion, and benefits for both BREB and PBS staff as per Sections 2(10), 25, and 26 of the Rural Electrification Board Act 2013 and a Supreme Court ruling under Civil Appeal Nos 82-83/2021, and nationalising all PBS.
- Each PBS complaint center should have at least one consumer representative with defined roles and powers mentioned in the regulations.
- After nationalisation, under Section 31 of the Rural Electrification Board Act 2013 and Supreme Court Civil Appeal No 2276/2021, no trade union activities should be allowed in PBS.
- Any decision to increase electricity prices must involve public hearings by BERC, in accordance with Section 34 of the Bangladesh Energy Regulatory Commission Act 2003.
- Disputes between BREB and PBS should be resolved under Section 40 of the BERC Act 2003. CAB is prepared to take the necessary steps.
On 23 October 2024, the Power Division formed a five-member committee headed by the Vice-Chancellor of BRAC University to review structural reforms of BREB and PBS. On 1 June 2025, in a meeting chaired by the Energy Advisor, the committee presented its report, recommending that PBS be transformed into companies for commercialisation.
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During the meeting, CAB raised three key questions:
- What is the basis for recommending that PBS be made into companies?
- Who were the stakeholders consulted, and why was CAB excluded?
- Who were the so-called experts involved in the report, and why was CAB's energy advisor not among them?
The committee claimed the recommendations were based on stakeholder input and data. However, the Power Secretary confirmed that "CAB's report was given to the committee." But they did not review it at all.
The committee only identified BREB and PBS as stakeholders, excluding CAB. In the stakeholder feedback meetings on 23 February 2025 and the finalisation meeting on 5 March 2025, CAB's input was not considered at all. CAB was only invited on 29 May 2025 due to special circumstances, after a directive from the Energy Advisor. CAB was told its feedback would be for government consideration, not for inclusion in the committee report, which had already been finalised on 5 March 2025.
CAB rejected the committee's report, criticising it for ignoring the severe impact of power shortages and price hikes on rural consumers. CAB warned that adopting the committee's recommendations would worsen conditions for rural people, comparing it to "throwing them from a hot pan into a fire." CAB called the report one-sided, flawed, incomplete, and riddled with conflicts of interest.
It is said that some PBSs are profitable while most are not. Profits are used to subsidise the losses. BREB is always profitable, yet all PBSs depend on government subsidies—about Tk60 to Tk70 thousand crore annually. The committee failed to explain how making PBS into companies would make them profitable or benefit consumers. It also did not clarify how costs would be reduced. It admitted to having no data or analysis. CAB pointed out that commercialisation usually means cutting jobs, but how would the jobs of 15 thousand metre readers be secured in such a company model? The Committee report said nothing.
CAB noted that regulatory agencies in the energy sector often protect vested interests, not consumers. Granting BREB additional power would make energy justice more difficult. The report ignored how BERC has failed to protect consumer rights. BREB remains untouched by ongoing energy sector reforms. These reforms have deprived people of energy justice. CAB stressed the need to evaluate BREB's role before incorporating it into reforms.
During the previous government, there were widespread irregularities in BREB's recruitment, procurement, and field-level operations. CAB's investigation revealed these issues. The Ministry of Power, Energy, and Mineral Resources often failed to act against such corruption. In some cases, complaints were sent to the very officials accused of misconduct for action. The ACC (Anti-Corruption Commission) confirmed that no complaints were sent by the ministry, although CAB's complaints were taken into account.
CAB fears the current energy advisor is attempting to succeed where Dr Tawfiq-e-Elahi failed—to implement the World Bank's agenda of commercialising rural electrification. CAB has warned that this agenda will never succeed.
If the government follows the World Bank and ADB's recommendations, rural electrification will become fully commercialised, like other energy companies. Those companies, while reporting profits, also show growing deficits. To cover losses, electricity prices are increased. Commercialisation of PBS will likely further increase costs and deficits. To address this, energy imports have increased, reaching 2,600 MW (9.34% of production capacity) and 1,671.52 crore units (18% of total electricity) in FY 2023-24. CAB fears that electricity imports will keep rising due to continued price hikes.
About 60% of the supplied electricity is consumed by PBSs. So, rising supply costs in PBSs are critical. ADB, World Bank, and IMF seem to want to turn Bangladesh into a major electricity and energy import market. India's Cross-Border Energy Trading Policy supports this agenda. CAB, therefore, opposes turning PBS into companies, as it believes this would go against the public interest.
Reforms in the power and energy sectors have been underway since the 1980s based on World Bank and ADB prescriptions, aimed at privatisation. The Power and Energy sector was restructured into around 75 companies. These companies now earn significant profits and keep funds in fixed deposits, earning interest at a lot. Yet they borrow at high interest rates and show deficits. To cover this, electricity prices are increased. The restructuring of PBSs is a continuation of this flawed policy. CAB rejected the restructuring proposal at its 4 June 2025 press conference.
The key issue in PBS is inequality and discrimination. Turning PBS into commercial entities will not solve this issue. The only real solution is to unify service rules for BREB and PBS. CAB has proposed this solution. Why has this been ignored?
On 5 June 2025, the Power Division issued a letter informing BREB and PBS of three decisions regarding the ongoing situation. One key decision is to form a high-powered committee to review demands for unified service rules or possible conversion into companies. The committee will consult stakeholders and review expert recommendations before submitting its report for final government action. The letter confirmed that PBS representatives at the Central Shaheed Minar protest agreed to return to work.
Whether the government is able to resolve the crisis while ignoring the World Bank and ADB's prescriptions remains to be seen.
M Shamsul Alam is the Energy Advisor at Consumers Association of Bangladesh (CAB) and Dean of the Faculty of Engineering at Daffodil University.
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.
