An official review by Bangladesh’s interim government has exposed critical flaws in the country’s power sector. It finds that long-term contracts signed without competition are pushing electricity costs to unsustainable levels — threatening both industrial competitiveness and household affordability.
The National Review Committee, commissioned after the fall of Sheikh Hasina’s 15-year rule, estimates that billions of dollars are lost each year through overpriced deals. These include contracts with Adani Power, Summit Group, S Alam Group, and Reliance Power.
Systemic Collusion and Contract Failures
The report accuses politicians, bureaucrats, and corporations of systematic collusion to secure long-term, overpriced contracts. Notably:
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Adani Power’s contract is cited as a prime example of “rent extraction”. Bangladesh pays 50 percent more than benchmark prices (4–5 cents per kilowatt hour), while taking on nearly all financial and fuel risks.
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The Power Development Board’s losses exceed $4.1 billion annually, while government subsidies are approaching $5 billion per year.
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The country has between 7.7 and 9.5 gigawatts of excess capacity, largely under “take-or-pay” contracts, meaning payments are made even when plants are idle.
Despite a fivefold increase in capacity since 2009, utilisation remains stagnant at 40 to 50 percent.
Political Change and Investor Risk
This review comes just weeks before the February 12 general elections, with public outrage over corruption, high prices, and energy mismanagement shaping voter sentiment. The interim administration under Muhammad Yunus is already cracking down on state-linked corruption. It estimates a staggering $234 billion siphoned off during Hasina’s rule.
Any attempt to renegotiate contracts, especially with large multinationals, may lead to international arbitration. However, the review argues that failing to act would have a more devastating long-term impact, including:
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A potential 86 percent rise in electricity tariffs
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A decline in industrial output
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Severe pressure on the garment export sector, which employs 4 million people and makes up 80 percent of export earnings
What’s Next for Bangladesh’s Energy Future?
The frontrunners in the election — the Bangladesh Nationalist Party (BNP) and a Jamaat-e-Islami–led bloc — are already calling for accountability and reform. Meanwhile, companies like Adani Power and Summit Group are rejecting the allegations, insisting on the competitiveness and oversight of their projects.
Bangladesh faces a complex dilemma: either risk legal disputes by revisiting legacy contracts or continue to suffer from unsustainable power economics.
Whatever course it chooses, the next administration must balance investor confidence with public interest if it hopes to restore fiscal stability and preserve industrial growth.