Obaidur Rahman

DHAKA, June 16, 2026 (BSS) - The government has taken a comprehensive action plan in the power and energy sector to strengthen energy security, ensure uninterrupted electricity and energy supply. 

The primary goal of these initiatives is to build a self-reliant, affordable, and sustainable energy system in the long run by expanding domestic gas and oil exploration, according the national budget for the fiscal year of 2026-27 placed on June 11. 

In the proposed budget for the 2026-27 fiscal year, the power and energy sector has been placed fifth among the 10 priority sectors. An allocation of Tk 17,345 crore has been proposed for this sector, which is 1.85 percent of the total budget.

The budget speech read uninterrupted and affordable power supply is the main driving force behind almost all economic activities, including industrial production. With this goal in mind, short-, medium-, and long-term plans are being implemented in the production, transmission, and distribution systems, it added. 

Due to unplanned power and energy policies, corruption, mismanagement, and a capacity charge-dependent power generation system during the previous government's tenure, expenditure in this sector increased significantly.

 Unilateral terms in some power purchase agreements and mega projects also increased the cost of electricity import and purchase. As a result, the subsidy in the power sector has exceeded Tk 40,000 crore in the current fiscal year, the proposed budget added.

According to the plan, the government is giving special importance to the renewable energy sector. Targets have been set to generate 20 percent of total electricity from renewable sources by 2030 and 30 to 50 percent by 2050 through expanding solar, wind, and waste-based power generation. To achieve this goal, initiatives have been taken to expand the rooftop solar program, conduct wind resource assessments in coastal areas, implement large-scale solar projects, implement waste-to-energy projects, and implement the National Energy Storage Roadmap and grid flexibility activities.

To ensure energy savings, the use of energy-efficient appliances and energy audit activities in industries are being strengthened. To encourage environmentally friendly and sustainable solar power generation, a zero percent tax rate has been set for the solar power sector until 2035. Additionally, a 5 percent tax rebate on solar electricity bills has been proposed. 
The government is implementing plans to increase power generation capacity to 35,000 MW by 2030. In the 2026-27 fiscal year, along with adding 1,839 MW of new generation capacity, initiatives have been taken to construct and modernize 9,154 kilometers of distribution lines and construct and reconstruct 900 circuit kilometers of transmission lines. At the same time, work on the Rooppur Nuclear Power Plant is being expedited. From this, 300 MW of electricity will be added to the national grid by August this year, and 1,200 MW by January next year.

To reduce import dependence in the energy sector, the government is strengthening new gas and oil exploration activities. To this end, the 'Bangladesh Offshore Bidding Round' has been announced, and the Model Production Sharing Contract (PSC) has been revised to make participation attractive for international companies. Nine blocks in shallow water and 15 blocks in deep water have been opened for international oil companies.

According to the government's plan, priority will be given to gas exploration and extraction in both onshore and offshore areas. Through Bangladesh Petroleum Exploration and Production Company Limited (BAPEX), plans have been adopted to complete 270 kilometers of geological surveys, 700 line kilometers of 2D seismic surveys, and 700 square kilometers of 3D seismic surveys during the 2025-26 to 2027-28 period. 

During this time, targets have been set to drill 69 wells and workover 31 wells using BAPEX's own rigs. Initiatives have also been taken to purchase two new rigs to increase exploration capacity. Additionally, under the 'Critical Mineral Exploration' program, emphasis is being placed on offshore gas and unconventional hydrocarbon exploration.

To increase the use of domestic mineral resources, targets have been set to produce 6 lakh metric tons of coal and 14 lakh metric tons of stone in the 2026-27 fiscal year. For this purpose, the second phase of the Barapukuria Coal Mine and the Dighipara Coal Field project have been adopted. Additionally, economic evaluation of valuable minerals like zircon and monazite in the sand of the Jamuna and Meghna rivers and digital transformation of the Department of Explosives' services are underway.

According to the plan, to protect domestic industry, it has been proposed to increase the existing 10 percent import duty on transformers of up to 1 kVA capacity to 25 percent and impose a new 5 percent regulatory duty.

On the other hand, to ensure long-term energy security and keep electricity prices affordable, it has been proposed to extend the validity of the notification regarding duty-tax exemption benefits on coal imports for power plants until June 30, 2030.