Bangladesh - Country Commercial Guide
Power and Energy

This is a best prospect industry sector for this country.  Includes a market overview and trade data.

Last published date: 2021-09-17


Demand for electricity in Bangladesh is projected to reach 50,000 megawatts (MW) by 2041.  The Government of Bangladesh has plans to increase power generation beyond expected demand to help propel growth in the export-oriented economy and meet the needs of a growing middle class by raising $127 billion in total investments in the power generation sector by 2041.  Electricity generation capacity has increased significantly over the last decade, despite poor transmission and distribution infrastructure, inadequate thermal efficiency in a large number of aged power plants, and a mismatch between the types of energy needed by existing plants and the fuel mix available.  Private power production units make up approximately half of total installed capacity.

Electrical generation capacity has increased from about 5 gigawatts in 2009 to 25 gigawatts in 2021, and access to energy has expanded to nearly 95 percent of the population.  Still, the reliability and quality of electricity remain major issues.  Improving the supply and reliability of electricity and energy in general, while maintaining affordability, is essential to supporting the continued growth of industry and commerce in Bangladesh.

The fuel mix used in Bangladesh’s power plants heavily favors natural gas.  As domestic natural gas fields are depleted, the Government of Bangladesh plans to increase the use of imported liquified natural gas (LNG).  Prior to 2020, the Ministry of Power, Energy, and Mineral Resources Plans planned to shift Bangladesh’s fuel mix toward coal – including by generating as much as 50 percent of total electricity using coal-based power plants by 2030.  However, in 2021 the Bangladeshi government scrapped plans to build 10 coal-fired power plants, citing unsatisfactory progress of the projects.  In addition, the government is framing a new Power System Master Plan (PSMP) where the use of coal will likely get a lesser priority in the face of pressure from environmental groups and development funding partners such as donor nations and development banks. The government is also considering importing more electricity from neighboring countries and expanding the use of renewable resources, including solar and wind power.

U.S. companies play an outsized role in the power and energy industry in Bangladesh.  U.S. companies account for the majority of Bangladesh’s domestic natural gas production and are among the largest investors in power projects.  U.S.-origin power turbines also provide much of Bangladesh’s installed gas-fired power generation capacity.

There are also opportunities for offshore gas exploration.  Currently, 26 offshore blocks exist in the Bay of Bengal, including 11 shallow blocks and 15 deep sea blocks.  Petrobangla, the state-owned oil, gas exploration, and production company, agreed in March 2020 to award U.S.-Norway joint venture TGS-NOPEC and Schlumberger a contract to conduct a 2D non-exclusive, multi-client seismic survey in the 26 blocks over two years.  According to press reports, the GoB had planned to invite international bidding on 21 offshore gas blocks in March 2020, but the announcement was postponed due to the outbreak of COVID-19.  The GoB also amended the terms of the Model Production Sharing Contract (PSC) in 2019 to attract greater international bidding interest, including reintroducing a provision to allow offshore drilling companies to export any gas Petrobangla refuses to buy.  However, U.S. companies continue to report their lack of interest in the offshore blocks due to the challenging structure of the offers.

In March 2017, without a public tender, the government and state-run Petrobangla signed a production-sharing contract with POSCO Daewoo Corporation of South Korea for oil and gas exploration in deep sea block 12.  The Bangladeshi government processed Daewoo’s proposal under the “Prompt Power and Energy Supply (Special) Act-2010,” under which there was no open competitive bidding process.  This was the first time a PSC was signed under the Special Act.

Leading Sub-Sectors

LNG Imports:  Bangladesh has turned to liquefied natural gas imports in recent years to help meet its burgeoning fuel demands.  The country set up its first floating storage and regasification unit (FSRU) off the coast of Moheshkhali in 2018, which a U.S. energy company developed and will operate it for 15 years.  Bangladesh currently has two FSRUs with a total LNG supply capacity of 1,000 million cubic feet per day (MMCFD).  The Government of Bangladesh has plans to build two additional LNG regasification terminals in the southern coastal areas of Payra and Matarbari, at least one of which will be land based.

Solar Power:  Bangladesh successfully implemented a large-scale Solar Home System (SHS) project with 5.8 million SHSes installed nationwide.  Bangladesh Sustainable and Renewable Energy Development Authority (SREDA) estimates home solar to have generated 327 megawatts in 2020.  Although Prime Minister Sheikh Hasina has publicly supported expanding renewable energy use in Bangladesh, renewable energy makes up less than one percent of the country’s on-grid electricity supply capacity.  Scarcity of land, high renewable energy tariffs, and the relatively high initial cost of setting up renewable energy plants are among the obstacles to implementing large-scale, on-grid renewable energy projects, including solar power plants.


Bangladesh may have sizable reserves of untapped gas in its offshore blocks in the Bay of Bengal.  Geologists have indicated prospects are good for locating gas, but commercially viable reserves have yet to be confirmed.  More concrete information will be available after completion of a seismic survey, estimated for 2023.

In addition to offshore deep-water exploration, possibilities exist for reinvigorating aging brown fields; further developing onshore gas fields; overhauling roads, waterways, and infrastructure to facilitate fuel transport; and building terminals and pipeline infrastructure to carry imported LNG and drilled natural gas to distribution hubs.  Long-term, changes in energy and business policies and regulations could provide commercial opportunities for deploying advanced energy technologies, including renewable energy, distributed energy resources, energy-efficient technologies, high-quality and reliable energy solutions, off-grid energy solutions, sustainable building technologies, and air pollution control systems.  Moreover, there will be demand for electricity transmission and distribution equipment as the government plans to expand and modernize the transmission and distribution system.


Energy and Mineral Resources Division

Power Cell (Power Division)

Bangladesh Power Development Board


Bangladesh Petroleum Exploration and Production Company Limited