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Unreliable Power Supply Costs Bangladesh $3.3B Annually

Industry: Energy & Power, Power

Bangladesh suffers an annual economic loss of $3.3 billion, equivalent to 1.5 percent of its GDP, due to an unreliable power supply to homes, offices, and factories, according to a World Bank report. Despite significant progress in energy access, power cuts remain a regular occurrence, with over 400 storm-triggered electricity outages on average each year. The report highlights low power generation asset utilization, fuel shortages, poor dispatch, and transmission constraints as key factors contributing to the problem.

Bangladesh secured a $500 million loan under the First Green and Climate Resilient Development Credit, but the World Bank imposed conditions related to power and energy. The government fulfilled two conditions, including one that eliminates capacity payments for rental power plants without a minimum guaranteed off-take. The finance minister outlined plans to operate more efficient larger power plants and phase out inefficient liquid-fuel rental generators and small independent power plants, aiming for an efficient fuel mix and reduced generation costs. The World Bank also recommended amendments to Energy Efficiency and Conservation Rules, aiming to systematically assess energy-saving potential and enhance efficiency through annual energy consumption reports, energy audits, and capacity development.

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