Mounting arrears, gas shortages and fuel import constraints threaten Bangladesh’s power supply, raising fears of significant load shedding as peak summer electricity demand approaches 18,500 megawatts.
Bangladesh risks renewed power cuts this summer as mounting payment arrears and acute fuel shortages threaten electricity generation, officials and industry leaders warn.
Outstanding bills to power plants have surged to nearly 460 billion taka, while unpaid gas bills stand at 165.16 billion taka. Private plant owners say they cannot continue buying fuel to generate electricity unless the dues are cleared, raising fears of load shedding during peak summer demand.
Power sector officials say electricity demand crossed 12,000 megawatts in February as winter ended and could exceed 18,500 megawatts during the summer. Although Bangladesh has an installed generation capacity of 28,000 megawatts, shortages of gas, coal and furnace oil mean it may struggle to produce enough electricity to meet demand.
Under existing contracts, the Bangladesh Power Development Board purchases electricity from both public and private plants. It sells each unit at a loss of five taka and relies on government subsidies to cover the gap. However, the finance ministry does not provide subsidies for jointly owned plants with foreign partners or for Indian power stations. As a result, BPDB’s deficit grows every year and it has failed to pay power producers on time.
Two senior BPDB officials said the interim government did not raise electricity prices and the new government is also reluctant to do so. They said the government must decide how to address the utility’s deficit, warning that ensuring uninterrupted supply during summer will otherwise be difficult.
During the tenure of the previous Awami League government, multiple power plants were set up without competitive bidding, with allegations that certain groups were favored through inflated capacity payments. Over the past 15 years, wholesale electricity tariffs were raised 12 times and retail tariffs 14 times. Consumer prices climbed from 3.76 taka per unit to 8.95 taka per unit.
Newly appointed State Minister for Power, Energy and Mineral Resources Iqbal Hasan Mahmud Tuku acknowledged the challenge. “There is a shortage of gas, a shortage of fuel and there are arrears. It is a complex situation,” he said. “People want electricity. They will not consider that the previous government left unpaid bills. The government has just taken office. Meanwhile, businesses are restless over recovering their old dues.” He said discussions are under way and expressed hope that load shedding can be limited if fuel supplies are secured.
Coal plants under strain
Coal-fired power capacity including imports from India’s Adani exceeds 7,500 megawatts. BPDB aims to generate 7,100 megawatts from coal in April but coal supplies remain uncertain.
Power generation rose by about 5.5 percent in the last fiscal year compared with the previous year. Gas remains the cheapest fuel source, accounting for 44 percent of generation last year, down from 48 percent a year earlier. Output from high-cost furnace oil and diesel plants has been reduced, while coal-based generation has increased.
Adani’s plant alone is expected to supply 1,436 megawatts. However, disputes over contract revisions and rising arrears have led the company to press for payments. Around 600 million US dollars are owed to Adani, of which 300 million dollars are undisputed and being demanded urgently. Any disruption in supply could intensify load shedding.
The 1,320 megawatt Payra coal-fired plant in Patuakhali, a joint venture between Bangladesh and China, is the country’s largest coal power supplier. More than 80 billion taka is owed to the plant, which could disrupt coal imports. Similar arrears affect the 1,320 megawatt Rampal plant in Bagerhat, the 307 megawatt Barishal plant and the 1,244 megawatt Banshkhali plant in Chattogram, all joint ventures between Bangladesh and India.
The 1,200 megawatt Matarbari plant has yet to sign a power purchase agreement with BPDB though it continues to supply electricity and has coal stocks. One 1,320 megawatt unit in Patuakhali will have to remain shut due to coal shortages as no supply contract has been finalized.
Dispute over penalties
Furnace oil-based plants have a combined capacity of 5,634 megawatts and BPDB plans to generate around 3,500 megawatts from them. If gas supplies fall further, reliance on oil-fired plants will have to increase. Yet disputes over unpaid bills persist.
According to BPDB, plants are allowed to remain shut for 10 percent of the year for maintenance without losing capacity payments. Any additional outage time results in forfeited capacity payments and penalties. As arrears mounted, outage calculations were suspended from July 2022. BPDB has now decided to calculate two and a half years of outages and impose penalties.
Plant owners argue that imposing penalties while bills remain unpaid is unjustified. They have filed complaints with the Bangladesh Energy Regulatory Commission following legal advice. On February 24, the regulator ordered a suspension of penalty collections until March 3.
Sector insiders say that out of 28,000 megawatts of installed capacity, 6,000 megawatts of gas-fired plants will remain idle due to fuel shortages. Around 1,500 megawatts from diesel and solar plants stay offline at night. At least another 1,500 megawatts will be under routine maintenance. That leaves about 19,000 megawatts available to meet peak demand. Without adequate fuel, several hours of load shedding may be unavoidable.
Plant owners say arrears began accumulating after Russia’s invasion of Ukraine in 2022. The previous government issued bonds twice to adjust payments. By July 2024, four months of bills were outstanding. The interim government cleared past and current dues from October 2024 to July 2025, reducing arrears to about three months. Since last July, however, payments have again been reduced and BPDB has moved to impose penalties instead of settling bills.
Imran Karim, former president of the Bangladesh Independent Power Producers’ Association, said it will be difficult to purchase fuel and continue generation if arrears are not cleared.
Gas shortages add pressure
BPDB says ensuring uninterrupted supply during the irrigation and summer season from March to May will require 1.2 billion cubic feet of gas per day along with adequate funds to import coal and liquid fuel.
Peak summer demand may reach 18,500 megawatts. If gas supply is limited to 1.1 billion cubic feet per day, load shedding of 534 megawatts would be required. At 1.0 billion cubic feet, shortages would rise to 1,104 megawatts. At 900 million cubic feet, load shedding would reach 1,674 megawatts and at 800 million cubic feet it would climb to 2,244 megawatts, potentially resulting in up to three hours of outages.
Petrobangla says domestic gas production continues to decline and import capacity cannot exceed 1.1 billion cubic feet per day. The state energy firm carries debts of 228.38 billion taka to the National Board of Revenue, Bangladesh Petroleum Corporation and the International Islamic Trade Finance Corporation. Unpaid gas bills from power plants total 165.16 billion taka, adding to its financial strain.
BPDB projects peak demand of 16,500 megawatts in March and plans to generate 5,700 megawatts from gas, requiring 1.0 billion cubic feet per day. In April, generating 6,270 megawatts from gas would require 1.2 billion cubic feet per day, which officials say is not feasible. More than half of the 12,204 megawatts of gas-fired capacity is likely to remain idle due to fuel shortages and unpaid dues at private plants.
Energy expert M Tamim, former energy adviser to a caretaker government chief adviser, said Bangladesh must reduce reliance on gas and maximize generation from oil and coal. Even then, he cautioned, the extent of load shedding will depend on summer temperatures. If conditions are milder as they were last year, the country may find some relief. Otherwise, he warned, power cuts are inevitable.
This report was published in Prothom Alo, a Bengali-language daily newspaper in Bangladesh, on February 28, 2026, written by Mahiuddin.
