Bangladesh Power Sector Suffers Record Losses Under Yunus Administration

Dhaka — Bangladesh’s power sector, once hailed as a symbol of infrastructure-driven development, has plunged into its worst financial crisis in history, recording losses of nearly Tk 77,000 crore during the 2024–25 fiscal year under the interim government led by Muhammad Yunus, according to official data and sector insiders.
An investigative review of the sector shows that a combination of policy mismanagement, unchecked reliance on Independent Power Producers (IPPs), opaque subsidy accounting and rising procurement costs has pushed the Bangladesh Power Development Board (BPDB) into unprecedented losses, raising alarms about long-term risks to the national economy.
From Chronic Shortages to Expansion: A Sector of Contrasts
The history of Bangladesh’s power sector reflects two sharply contrasting phases. During the 2001–2006 BNP–Jamaat government, power generation stagnated amid widespread mismanagement. Although electricity demand rose to nearly 5,000 MW, actual production hovered between 3,400 and 3,500 MW, resulting in daily load-shedding of up to 10 hours.
By 2006, total generation capacity had fallen to 3,782 MW, down from 4,300 MW in 2001. The sector incurred losses of Tk 10,626 crore in the 2005–06 fiscal year, while nearly 90 percent of industries relied on diesel generators to remain operational.
2009–2023: Era of Rapid Growth
Following the Awami League’s return to power in 2009, the electricity sector underwent dramatic transformation. Through long-term planning and heavy investment, generation capacity expanded from 3,782 MW in 2009 to nearly 25,000 MW by 2022–23.
Electricity access increased from 47 percent to 99.5 percent, with about four million new households connected to the grid. Transmission and distribution networks expanded nationwide, including in remote regions. By 2021, chronic load-shedding was largely eliminated, while system losses were reduced to 8.73 percent.
2024–25: Financial Collapse Under Interim Rule
The crisis deepened following the fall of the Sheikh Hasina government in 2024 and the installation of the Yunus-led interim administration. Despite promises of reform, BPDB’s net loss surged to Tk 17,021 crore in 2024–25 — a 94 percent increase over the previous year.
During the same period:
Total expenditure: Tk 1,21,420 crore
Total revenue: Tk 69,383 crore
Government subsidy: Tk 38,636 crore
Taken together, analysts estimate the effective economic loss at nearly Tk 77,000 crore, marking the largest annual deficit in the sector’s history.
IPP Dependence Fuels Cost Explosion
A major driver of the losses is excessive reliance on private power producers. BPDB spent Tk 72,071 crore purchasing electricity from IPPs — almost Tk 28,000 crore above budgeted allocations.
The average electricity purchase price rose to Tk 14.45 per unit, while production costs stood at Tk 12.10 per unit, creating a widening financial gap.
Further controversy has emerged over subsidy figures. While BPDB reports subsidies of Tk 38,636 crore, the Power Division claims the figure is Tk 59,600 crore, raising serious concerns over transparency and accountability.
Falling Global Fuel Prices, Rising Domestic Costs
Despite declining global oil and gas prices, electricity generation costs in Bangladesh have continued to rise — a trend the authorities have failed to adequately explain. Energy economists warn that structural flaws in procurement contracts and tariff mechanisms may be driving inefficiencies.
Professor M. Tamim, Vice-Chancellor of Independent University, Bangladesh (IUB), said,
“Without a rational review of production, procurement and pricing structures, it will be impossible to recover from these losses.”
Economy at Risk
Experts caution that the scale of losses represents more than a sectoral failure, describing it as an “economic catastrophe” with direct implications for public finance, inflation and industrial competitiveness.
Unless urgent reforms are undertaken, analysts warn that the power sector’s financial collapse could undermine Bangladesh’s broader economic stability.