The capacity charge in the form of power subsidy has remained at an elevated level of around Tk 3,000 crore each month on average over the past 30 months including 17 months under the interim government.

Finance ministry officials calculated that the monthly power subsidy was less than Tk 1,000 crore in 2021-22.

In the past week, the Finance Division provided around Tk 24,000 crore to the Bangladesh Power Development Board to clear the arrears to its private power suppliers from the overall allocation of power subsidy at Tk 37,000 crore for the current financial year of 2025-26.

Division officials suspect that the amount of subsidy will supersede the initial projection once again in the current FY26 like the previous three financial years.

Shamsul Alam, energy adviser to the Consumers Association of Bangladesh, said that the interim government had failed to bring about major changes to the energy sector.

The current interim government has almost maintained the structure built by the Awami League regime through the Quick Enhancement of Electricity and Energy Supply (Special Provisions) 2010, he said.

PDB officials attributed the growing generation capacity against almost static demand and the presence of 32 costly and fuel guzzling power plants awarded without competitive bidding during the AL regime for the elevated power subsidy.

Besides, the supply shortage of gas to a privately run power plant and a number of coal-fired power plants, including one in the Indian state of Jharkhand by the Adani Power Limited with inflated prices, give no relief from the growing power subsidy, around 80 per cent of which is used for capacity charge.

Giving guarantee of payment with profit to the private power producers even in case of keeping plants idle, the capacity charge payment almost tripled the power subsidy to Tk 29,511 crore in 2022-23 from Tk 11,940 crore in 2021-22 because of unutilised generation capacity.

In 2023-24, the power subsidy stood at Tk 35,000 crore.

The current government that assumed power on August 8, 2024, three days after the AL government prime minister Sheikh Hasina fled to India amid a mass uprising scrapped the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act in November 2024 to bring about transparency in future power deals.

But it has to keep continuing the payment of the capacity charge.

In 2024-25, the Finance Division provided around Tk 62,000 crore in power subsidy, including arrears from the previous years.

As the termination of the controversial power deals might risk facing legal challenges, the current government just decided not to extend the tenure of the controversial plants after their expiry.

PDB officials said that 32 fuel guzzling power plants owned by private groups with the generation capacity of 3,605 MW would expire between 2029 and 2035.

They mostly remained idle and were used only in peak hours of summer days, officials said while highlighting the gap between the generation and the installed capacity.

Former World Bank Dhaka office chief economist Zahid Hussain said that a vicious cycle had gripped the country’s overall power and energy sector because of faulty plans, overpriced deals, and corruption during the past political regime.

The overall daily power generation capacity of the PDB reached 28,909 megawatt at the end of 2025, according to a PDB draft prepared on January 14.

On July 23, 2005, the PDB generated the highest amount of power at 16,794 MW, but its generation fell between 8,000 MW and 10,000 MW recently because of the drop in the demand for the current winter season.

Because of the big gap between the installed capacity and the generation, the national budget has been facing stress over the past several financial years because of the power subsidy.

Zahid Hussain resented that the nation would have to pay the price of the power sector mismanagement for many days to come.

Zahid, who was a member of the national committee to review controversial power sector agreements during the AL regime, calculated that the annual capacity charge to the Jharkhand power plant of Adani amounted to around $85 million.

The government has also incurred capacity charge amounting to Tk 59 crore per month as the PDB failed to supply gas to 718MW power plant at Meghnaghat which started commercial operation on July 28 July, 2025.

In September 2023, Nasrul Hamid, the former State Minister for Power, Energy, and Mineral Resources, said that the government had paid a total of Tk 1.04 lakh crore in capacity charges and rental payments to private-sector power plants across its three consecutive terms from 2009 to mid-2023.

Following are the fuel-based rental power plants.

Rajlanka 52 MW, Natore, 2. Baraka Patenga 50MW, Chattogram, 3. Gagnagar (Orion )102 MW, Naryanganj, 4. Lakdanavi 55MW, Jangalia, Comilla, 5. ECPV 108MW , Chittagong 6 Madanganj 55MW, Naryanganj , 7. Kathpatti 52 MW, Munshiganj, 8. Summit Barisal 110 MW, Barisal, 9. Southern Power 55MW, Nababganj 10. Northern Power 55MW , Manikganj, 11 Jamalpur IPP 95MW, Jamalpur, 12 Basila 108 MW Keraniganj, 13. Kamalaghat 54 MW, Munshiganj, 14. Summit 300MW,Gazipur, 15. Summit Kodda 149MW, Gazipur, 16. United 200MW, Mymensingh, 17. Orion Labon Chora 105 MW, Khulna, 18. Acorn Juldah Unit-3 100MW, Chattogram, 19. Midland East 150MW, Ashuganj HFO, 20. Desh energy 200 MW, Chandpur, 21. United 115 MW, Jamalpur, 22. Confidence Power U-2 113MW, Bagura, 23. Baraka, Shikalbaha Power Plant 105MW, Chattogram, 24. Cornafuli Power Shikalbaha, 110MW. 25 Confidence 113 MW, Rangpur, 26. Zodiac 54.36 MW 27. Confidence Power Unit-1 113MW, Bogra, 28. Feni Lanka Power Ltd 114MW, Feni, 29. United Anowara 300MW, Chattogram, 30. HF Power Ltd 113MW, Feni. 31 Orion Sonargaon Power Ltd.104MW, Narayanganj, and 32 Acorn Julda-2 100M, Chattogram.