On the banks of the Padma River, the twin domes of the Rooppur Nuclear Power Plant rise as a US$12.65 billion monument to Bangladesh’s developmental ambitions. Built with Russian credit and technology, it promises 2,400 megawatts of carbon-free baseload power. Yet as the giant nears completion, it serves as a poignant metaphor for the South Asian nation’s broader energy landscape: a sector where the physical hardware of modernity has outpaced the institutional software required to run it.
Bangladesh’s power sector certainly has a capacity problem; more urgently, it has a competence crisis. For 15 years, the formula for political legitimacy in Dhaka was simple—supply more megawatts. Between 2009 and 2024, installed capacity of the national grid surged from roughly 5,000 MW to over 30,000 MW, including captive power and imports. On paper, the achievement is staggering. Grid access is now near-universal, and the soul-crushing load-shedding that once defined Bangladeshi summers has been pushed back.
However, as any economist knows, a surge in gross generation can mask deep structural rot. Bangladesh has built a larger power sector without building an equally efficient one. The numbers now tell a story of fiscal hemorrhaging. The Bangladesh Power Development Board (BPDB) is trapped in a classic “scissors crisis”: costs are rising while revenue remains tethered to political gravity. The average generation cost now sits at approximately $0.10 per kilowatt-hour, yet the bulk tariff remains near $0.05 per unit. This structural deficit has turned the power sector into a black hole for the national treasury. Reported losses for the BPDB exploded from $448 million in fiscal year 2015 to a projected $4.15 billion in FY2025. Between FY2020 and FY2024 alone, the government injected $10.4 billion in subsidies to keep the lights on. In a country where the tax-to-GDP ratio remains one of the lowest in the world, this is capital being diverted from primary schools, climate-resilient embankments, and the high-tech logistics needed to escape the middle-income trap.
The Vanity of Installed Capacity
The central paradox is that “installed capacity” has become a vanity metric. Of the 30,000 MW on the books, a significant portion is functionally ghost capacity. This is partly due to a reliance on capacity charges—contractual obligations that require the state to pay private power producers even when their plants sit idle. In FY2023, these payments reportedly exceeded $2.13 billion. Bangladesh is effectively paying for the privilege of not consuming electricity. This overcapacity in name only coexists with frequent blackouts in reality because the system lacks fuel security.
Natural gas, the historical backbone of the sector, illustrates the folly. Domestic production from aging fields like Titas is in terminal decline, yet the build-out of gas-fired infrastructure continued unabated. To fill the gap, the state has turned to the volatile spot market for liquefied natural gas (LNG), exposing the economy to the whims of global geopolitics and currency fluctuations. Building sophisticated combined-cycle turbines without securing a 20-year fuel supply is the maritime equivalent of commissioning a fleet of supertankers while the ports are silted shut.
Furthermore, the competence crisis is most visible in the human capital deficit. Infrastructure can be bought with sovereign debt; expertise must be cultivated. A modern grid—increasingly reliant on intermittent renewables, cross-border trading with India, and eventually, the complexities of nuclear physics at Rooppur—requires a sophisticated caste of technocrats. It demands cyber-security specialists to guard against grid sabotage, market analysts to hedge fuel prices, and independent regulators with the teeth to audit opaque contracts. At Rooppur, the stakes are existential. Nuclear power requires an uncompromising safety culture and a regulatory body entirely insulated from political expediency. If domestic technical capability lags, Bangladesh will find itself in a state of perpetual “consultancy dependency,” paying premium rates to foreign operators to manage its own strategic assets. Strategic infrastructure without strategic indigenous expertise is not a sign of development; it is a new form of vulnerability.
The remedy requires more than just another round of megaproject ribbon-cutting. First, pricing reform is unavoidable. The current regime of artificially low tariffs provides a hidden subsidy to the wealthy and the wasteful while starving utilities of the capital needed for maintenance. A transition toward cost-reflective pricing, tempered by lifeline tariffs for the poorest quintile, would restore the sector’s creditworthiness and encourage industrial efficiency. Second, the planning paradigm must shift from capacity-centric to system-value. In many parts of the country, the bottleneck is no longer the lack of a power plant, but the frailty of transmission and distribution lines. High system losses—a polite term for technical leakage and theft—continue to plague the BPDB. Investing in smart grids, high-voltage DC lines, and battery storage often yields a higher return on investment than adding yet another oil-fired quick rental plant to a saturated market.
Finally, governance must be dragged into the light. Competitive procurement should be the absolute rule, not the exception. The use of special acts to bypass transparent bidding has historically led to bloated capital costs and unfavorable terms that haunt the national balance sheet for decades. A power sector that operates behind a veil of executive discretion will always be prone to unmanaged ambition. As Bangladesh's money printing risks rekindling inflation, the fiscal strain from power subsidies only deepens. Meanwhile, the fuel crisis driven by government mismanagement underscores the systemic failures. For Dhaka, the path forward demands not just more megawatts, but a fundamental reckoning with how they are planned, priced, and governed.
