Meta Data
Draft: 
No
Revision of previous policy?: 
No
Draft Year: 
2000
Effective Start Year: 
2000
Effective End Year: 
2020
Scope: 
National
Document Type: 
Overarching Policy
Economic Sector: 
Power
Energy Types: 
Power, Renewable
Issued by: 
Power Division Ministry of Power, Energy and Mineral Resources Government of the People’s Republic of Bangladesh
Overall Summary: 
The Vision Statement Policy and the Policy Statement on Power Sector Reforms offer an overview on the Bangladesh power sector. The objective of the Vision Statement is to provide access to affordable and reliable electricity to all by the year 2020. The document addresses an introductory part on the power sector, an operational part regarding the achievement of power-related objectives, ongoing and specific measures overtaken by the Government of Bangladesh and future proposals. The second part of the document is the Policy Statement on Power Sector Reforms, which describes the current power sector's situation, past reform activities and eventually, the Government's vision. The Government's vision includes: Long term goals; Detailed power sector reforms; Reform strategy; Employees issues; Tariff; Regulation of the power sector; Financial restructuring; Implementation.
Access
Energy access priorities: 
[...]providing access to affordable and reliable electricity to the majority of the people of Bangladesh by 2020 is a fitting national goal to usher the next millennium. The gas resource of Bangladesh, [...] provides a special window of opportunity. Adequate, reliable and reasonably priced supply of electricity is an essential input for national development. Making electricity available to all the people of the country at affordable price can improve standard of living of the people and enhance the economic development of the country.
Energy access targets: 
Bringing entire country under electricity service by the year 2020.
Efficiency
EE priorities: 
In order to realise the vision, the Government has set a number of objectives for the power sector reform. These include: [...] Increasing the sector’s efficiency.
EE action plans: 
The main components of the proposed reforms program are: Development of demand management including energy efficiency measures to conserve energy. --- Limited measures for demand management have been tried by reducing the shopping hours at night, restricting energy intensive uses at peak hours [...].
Renewable Energy
RE priorities: 
The main components of the proposed reforms program are: Development of alternative/renewable energy sources.
Pricing
Energy pricing: 
--- The main components of the proposed reforms program are: Introduction of cost reflective tariff for financial viability of the utilities and promoting efficient use of electricity. --- Balancing the interests of the consumers and the industry will guide the setting of tariffs. The process will progressively reflect the cost of supply of electricity at an adequate and improving level of efficiency. In designing the tariff structure and rates, issues such as the least cost development plan, efficient allocation of resources and legitimate and deserving socioeconomic considerations will be taken into account.
Energy Supply and Infrastructure
Infrastructure development priorities: 
The main components of the proposed reforms program are: Development of alternative/renewable energy sources.---[...] Specific measures undertaken by GOB [include:] A mixed sector power plant of initial capacity of 70MW with ownership divided among REB, PBS and eventually private sector [...]. --- Transmission system should be expanded in tandem with generation capacity expansion on one hand and growth of demand on the other. Efficient network development, expansion and management capable of accessing the most efficient supply of power and transport it to customers should be designed and implemented. Resources, domestic and foreign have to be arranged for these purposes. The transmission network will be owned, operated, planned and developed by a corporatized entity in the public sector. --- Highest in the agenda is to improve the commercial and financial performances of the distribution entities to reduce system loss in particular. The ongoing measures need to be continuously reviewed, adjusted and modified to solve problems and achieve designated results. --- Gas network expansion in the western Bangladesh, of which the first important project has already been implemented by taking gas across the Jamuna river along the Bangabandhu Bridge, should be undertaken with urgency to replace liquid fuel in the existing power stations and add new gas based capacity. --- In operational term, the broad objective (...) calls for large addition to generation capacity over time, expansion of grid and distribution networks.
Trade
Energy trade priorities: 
In order to realise the vision, the Government has set a number of objectives for the power sector reform. These include: exploring the possibility for export of power to augment and diversify foreign exchange earnings.
Investment
Energy sector investment priorities: 
New generation projects would be selected to enable the desired security of supply at generation level to be met at least cost. The Government would seek new generation capacity through a mix of sources i.e. both public and private.
Independent power producers: 
The main components of the proposed reforms program are: d) Private sector participation in power generation and distribution. --- The power stations under construction and the future ones in the public sector would be configured as individual profit center and they may be incorporated as independent generation companies, if deemed appropriate and necessary.
Investment climate development: 
Availability of capital, particularly from external sources, would be critical in ensuring the stipulated growth and expansion. [...] policies and practices that ensure such capital flows must be in place. Given the history of past FDI flows into Bangladesh, the best bet is a mix of concessional capital and FDI. Steady growth in foreign exchange earnings with exchange rate stability would determine the long-term viability of such large capital flows in and out of the country. ---In order to realise the vision, the Government has set a number of objectives for the power sector reform. These include: Increasing private sector participation to mobilise finance. [...] Promoting competition among various entities. The main components of the proposed reforms program are: d) Private sector participation in power generation and distribution.
Public Private Partnerships: 
The main components of the proposed reforms program are: d) Private sector participation in power generation and distribution --- [...] Specific measures undertaken by GOB [include:] A mixed sector power plant of initial capacity of 70MW with ownership divided among REB, PBS and eventually private sector [...].
Governance
Energy management principles: 
The overarching guiding principles for the reform strategy for the future will be pragmatism based on the experiences gained from the ongoing measures, reliance on the empirical findings about the best practices and giving due consideration to the socioeconomic and governance context. --- The transmission network will be owned, operated, planned and developed by a corporatized entity in the public sector. --- The broad features of the emerging structure of the industry have also been generally agreed. To start with, a single buyer model may be adopted. [...] The Single Buyer shall be a public sector entity. Initially BPDB will act as a Single Buyer till a suitable alternative organization is setup. --- In order to realise the vision, the Government has set a number of objectives for the power sector reform. These include: Using natural gas as the primary fuel for electricity generation [...]. [...] Making the power sector financially viable and able to facilitate economic growth.
National policy structure: 
To set out the overall framework for the improved performance of this sector – the Energy Policy was prepared and adopted in 1996. The policy, among others, provides the broad guidelines for power sector reform including the evolving structure of the industry and its regulation. --- To introduce competition, induct foreign private capital and more importantly, to increase power supply to alleviate the acute shortage—Private Power Generation Policy was developed and adopted in 1996. --- Measures for establishment of an effective and accountable regulatory regime would continue to be identified and implemented. To this end, legislation regarding the Energy Regulatory Commission will be enacted.
Energy institutional structures: 
To set out the overall framework for the improved performance of this sector [...] A separate organization termed as Power Cell was created to design, facilitate and monitor reform measures. --- Present Configuration of Power Sector: The entities responsible for different functions of the sector are: 1. GENERATION • Bangladesh Power Development Board. • Rural Electrification Board. • Private Power Generation Companies. 2. TRANSMISSION • Bangladesh Power Development Board. • Power Grid Company of Bangladesh Ltd. 3. DISTRIBUTION • Bangladesh Power Development Board. • Dhaka Electric Supply Authority. • Dhaka Electric Supply Company Ltd. • Rural Electrification Board through Rural Electric Co-operatives. --- Separating out all existing power generation units through a corporatized national power generation entity will pave the way for restructuring power generation on commercial lines.
M&E of policy implementation: 
The ongoing measures need to be monitored, evaluated and consolidated to identify the future course including the need for their modifications and enlargement [...]. --- Evaluation of performance of the profit centers and the corporatized entities will form the basis for expansion, enlargement and design of future reform measures. --- A revised and updated implementation program for reforms and restructuring of the power sector incorporating the ongoing measures will be prepared considering a realistic timetable and covering all intermediate steps. Accordingly, all concerned agencies will workout a time bound performance/result oriented implementation program. This process will be monitored regularly.
Technology
Technological cooperation in energy distribution: 
Along the way, projects and programs should be put in place to [...] explore the possibilities of innovative solutions like remote reading, computer networking, dividing BPDB’s national distribution system into a number of profit center based on commercial lines etc.