Dhaka: The government has embarked on an ambitious plan to cut the overall cost of power generation by 10%, as outlined in the proposed national budget. This initiative aims to ensure an adequate and affordable energy supply across the country, enhancing the quality of life for citizens and supporting economic growth.
According to Bangladesh Sangbad Sangstha, Finance Adviser Dr. Salehuddin Ahmed highlighted in his budget speech on Monday that Tk. 22,520 crore has been allocated to ensure energy security, modernize the distribution system, and generate 3,400 MW of electricity from clean sources by 2028. A significant decision from the budget includes generating 30% of the country's electricity from renewable sources by 2040.
The budget proposal allocates Tk. 20,342 crore for the power division and Tk. 2,178 crore for the energy division in the fiscal year 2025-26 (FY26). Dr. Ahmed noted that the government currently provides a power sector subsidy amounting to approximately 1.0% of the country's GDP. By implementing the cost reduction plan, the government expects to save more than Tk. 11,000 crore in electricity subsidies.
To achieve this, a separate committee has been formed to review and renegotiate tariff structures in purchase agreements. Energy audits will be conducted to identify cost-reduction opportunities. Despite prevailing high inflation, the government has decided not to increase electricity prices for the time being.
Additionally, the government plans to supply 648 million cubic feet of gas from domestic sources this year and extract an additional 1,500 million cubic feet of gas by 2028. Efforts are being made to increase the capacity of the local gas exploration company BAPEX, with necessary funds allocated for this purpose.
In a bid to modernize the power distribution system, underground placement of distribution lines and substations is underway in metropolitan areas to enhance system stability and efficiency. An agreement with Nepal, signed on October 3, 2024, will allow the import of 40 MW of hydropower to meet summer electricity demands.
The government is optimistic that the 2,400 MW Rooppur Nuclear Power Plant will contribute to the national grid by December this year. An Integrated Power Sector Master Plan has been prepared, setting a target to generate 3,400 MW of electricity from clean sources by 2028.
To bolster energy security, the government is taking steps to increase oil and gas exploration and production through domestic efforts. BAPEX plans to undertake extensive geological, 2-D, and 3-D seismic surveys between FY2025-26 and FY2027-28, drill 69 wells, and complete workover of 31 wells using its own rigs. Concurrently, cost-effective and sustainable infrastructure development is underway to control energy prices.