Energy budget dents govt's 'Three Zeros' pledge: CPD

Centre for Policy Dialogue (CPD) has warned on Thursday that the energy budget undermines the government's Three Zeros pledge - Zero Poverty, Zero Emission and Zero Unemployment, particularly the Zero Emission goal. 

Raising serious concerns over Bangladesh's proposed national budget for FY2025-26, CPD warned that its fossil fuel-heavy focus threatens the country's clean energy transition and long-term sustainability.

"Without urgent reforms, Bangladesh may fall further behind in its energy transition as per energy sector's analysis of the budget, placed on June 2 and approved on June 22," Dr Khondaker Golam Moazzem, Research Director at CPD told in a city dialogue titled 'Power and Energy Sector in the National Budget for FY2025-26: Reflections on the Priorities for Energy Transition', held at BRAC Centre Inn in Mohakhali, Dhaka. 
 
CPD said that the budget address the future plan of the energy sector titled 'Building an Equitable and Sustainable Economic System.'

But CPD said it contradicts that vision by prioritising fossil fuels over renewables. 

It said the upcoming fiscal year will be a decisive test of the government's resolve to uphold its climate and energy transition pledges. 

CPD said that half of the national subsidy payment and incentives is allocated for power and energy sector, power sector received the allocation of Tk 37,000 crore (41 per cent of the total subsidy) and allocates Tk 9,000 crore (10 per cent of total subsidy) in LNG.
Energy Adviser Muhammad Fouzul Kabir Khan joined it virtually as chief guest.

"CPD Power and Energy Study has undertaken this study with two broad objectives, (1) to analyse whether the Interim government in right track addressing the sectoral challenges  and (11) to find out whether the budget adequately put focus on its political commitment of meeting the "3 Zero" targets," it said.

Focusing on the core issues of Bangladesh's power and energy sector it categorically said that currently the sector is facing major challenges mainly due to the financial crunch, the financial challenges of the BPDB, PetroBangla and BPC and shortages of gas supply, emphasis on importing LNG and slow progress in gas exploration are major hurdle.

"Shortages of electricity supply and increasing generation capacity, faulty pricing method followed for energy pricing, slow progress in tender for solar-based power plants, cancellation of LOIs, payment due to local and foreign companies and taking costly loans, slow policy shift for energy transition is expected that the budget will address these sectoral challanges.

Riding on the upward adjustment of fuel oil prices under the automated pricing mechanism, state-owned Bangladesh Petroleum Corporation (BPC) earned a profit of Tk 2,050 crore in the fiscal year 2024-25, the Centre for Policy Dialogue (CPD) said on Thursday, it said adding that the BPC's profit will decline to Tk 615 crore in the upcoming FY2025-26 due to rising global oil prices. 

Government's net external borrowings of Tk 1.09 trillion in FY2025 is mainly because of the sectoral fiscal burden of the power and energy sector although the interim government has cleared a major part of energy import dues of around US$1.17 billion.

It said Gas Development Fund (GDF) remains unutilised, even sometimes used for clearing LNG import bills, 35 per cent of the fund was used to import LNG, while the rest 65 per cent remained unutilized.

CPD said state-owned Bangladesh Petroleum Corporation (BPC) earned a profit of Tk 2,050 crore in the fiscal year 2024-25. Alongside BPC, two subsidiaries of Petrobangla - Bapex and RPGCL - also turned profits in FY2024-25, CPD said. 

According to CPD, BAPEX made a profit of Tk 137 crore while RPGCL earned Tk 41 crore largely due to increased gas prices at the industrial level.

CPD estimated that BPDB incurred a loss of Tk 8,803 crore in FY2024-25 and is projected to face an even higher loss of Tk 9,043 crore in FY2025-26.