Infrastructure Projects in Bangladesh: G2G, PPP and Project Development Law

Infrastructure projects Bangladesh: the 2026 legal framework

The law governing infrastructure projects Bangladesh commissions, finances and builds changed shape in 2026. Parliament ratified the 2025 overhaul of public procurement in April, the Invest Bangladesh Act 2026 repealed the PPP Act 2015 and folded the PPP Authority into a single investment agency in August, and the new Commercial Courts now hear construction and infrastructure disputes. Each of these changes matters to anyone who signs a works contract, a concession or a loan for a road, port, power plant, bridge or economic zone.

This guide is written for sponsors, EPC contractors, lenders and the agencies that procure from them. It explains each delivery model in law: public procurement, government-to-government (G2G) contracting, public-private partnership, and projects funded by export credit agencies, multilateral banks, JICA, the AIIB and Chinese lenders. It then follows a project through development, EPC and FIDIC contracting, land, environmental clearance, payment security and disputes.

Summary: Infrastructure in Bangladesh is delivered through five legal routes: open public procurement under the Public Procurement Act 2006 as amended in 2026, G2G arrangements under bilateral framework agreements, PPP under Chapter 8 of the Invest Bangladesh Act 2026, projects financed by development partners on their own procurement rules, and private projects such as independent power plants. The route decides who approves the deal, which rules govern selection, how risk is allocated and where disputes end up.

Key point: The Bangladesh Public-Private Partnership Act 2015 no longer exists. Section 66 of the Invest Bangladesh Act 2026, in force since 20 August 2026, repealed it and dissolved the PPP Authority, while saving acts already done and keeping rules made under the old Act alive where they do not conflict. Every PPP and G2G document drafted before August 2026 should be checked against the new Act.

At a glance

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Table of Contents

Infrastructure projects Bangladesh 2026: the legal map

There is no single infrastructure statute in Bangladesh. A project is governed by a stack of laws that apply according to who pays, who owns the asset and who selects the contractor. The first legal question on any new scheme is therefore not "what does the contract say?" but "which delivery route is this?" The answer fixes the approval chain, the procurement method, the standard documents, the dispute ladder and the regulator who can stop the project.

The money behind the pipeline is large but under pressure. Implementation is the constraint: only 67.52 per cent of the revised FY2025-26 Annual Development Programme of Tk 208,935.53 crore was spent, a five-year low.[7] That gap between allocation and spending is the commercial context for every payment and delay clause discussed below.

Five delivery routes

Most infrastructure projects Bangladesh undertakes fall into one of five legal routes. Conventional public works are tendered by a procuring entity under the Public Procurement Act 2006 and the Public Procurement Rules 2025. G2G projects are negotiated under a framework agreement with a foreign government, which nominates a state-owned or private contractor or investor. PPP projects are concessions in which a private partner finances, builds and operates an asset and is paid by user charges, by the state or by both. Foreign-financed projects follow the procurement rules of the lender where the loan agreement says so. Private projects, notably independent power plants, are licensed and contracted under sector law.

Why the route must be fixed first

Mixing routes is where deals fail. A contractor that negotiates directly with a ministry on a project already advertised for tender has no legal path to award, and a sponsor that treats a G2G memorandum as a concession will find it creates no enforceable project rights. Fixing the route early protects the validity of everything signed later.

Public procurement after the 2025 and 2026 amendments

Publicly funded works, goods and services are bought under the Public Procurement Act 2006. The interim government amended it by the Public Procurement (Amendment) Ordinance 2025, and the elected Parliament passed the Public Procurement (Amendment) Bill on 9 April 2026; it was gazetted as Act No. 41 of 2026 on 10 April 2026.[3] [4] The detailed procedure now sits in the Public Procurement Rules 2025. Our separate notes on the 2026 public procurement amendments and the current procurement framework explain the tender process step by step; this section focuses on what the changes mean for infrastructure.

What the 2026 Act changed

The Bill was moved by Finance Minister Amir Khosru Mahmud Chowdhury. It widens the objectives of public procurement beyond transparency and accountability to value for money, efficiency, ethics, quality and sustainability; introduces sustainable public procurement and bars tender terms that harm the environment or breach labour and child-labour protections; allows reverse auctions and framework agreements; makes the e-GP portal mandatory, with exceptions only on prior approval of the Bangladesh Public Procurement Authority; and recognises "physical services" as a separate category.[4] For government-funded IT services tendered internationally, a local firm must be included as a joint venture partner.[4]

What it means for works contractors

Three effects stand out. Every step of a national tender now leaves an electronic record, which helps a bidder challenging an evaluation. Environmental and labour compliance becomes a tender condition, not just a site issue. And debarment and integrity rules carry through into PPP, because the Invest Bangladesh Act 2026 defines corrupt, fraudulent, collusive and coercive practice in PPP selection by reference to rule 149 of the Public Procurement Rules 2025.[1]

Direct deals, special laws and the end of the power-sector shortcut

For more than a decade, power and energy contracts could bypass competitive tender under the Quick Enhancement of Electricity and Energy Supply (Special Provision) Act 2010. On 14 November 2024 the High Court Division declared its immunity provision, section 9, unconstitutional, and the Act was repealed by ordinance later that month. Contracts made under it remain valid, but the government may review them in the public interest.[12] Anyone holding or financing a legacy power contract should read it with that review power in mind, and new energy infrastructure should be expected to follow competitive procurement or a properly approved PPP or G2G route.

The G2G contracting framework

G2G is the route behind many of the largest infrastructure projects Bangladesh has signed with foreign governments. Its attraction is speed and access to concessional or state-backed finance. Its legal weakness is that the framework agreement between two governments rarely gives a contractor or investor enforceable rights by itself. Those rights come only from the project documents that follow, and those documents must clear Bangladesh's own approval chain.

G2G PPP under the 2017 Policy

The Policy for Implementing PPP Projects through G2G Partnership 2017 lets the government engage directly with another government, which arranges finance and selects a state-owned or private entity to act as investor.[2] The procedure is set by a bilateral framework agreement or memorandum of understanding, which may cover how investors are selected (including direct selection, limited or open tendering), governance and approvals, the feasibility study, negotiation of the PPP contract, the delivery team and dispute resolution.[2]

Three rules in the Policy shape strategy. A project may be switched to G2G only before the bidding phase begins; once an invitation for bid or request for qualification issues, G2G is closed unless that bidding fails.[2] As made in 2017, the Policy applied to projects costing at least Tk 2,000 crore, or smaller projects that launch a programme of that size.[2] Linked components such as land acquisition, resettlement, utilities and approach roads are delivered by the government with its own funds, unless the G2G financing covers them by agreement.[2] The Policy was amended later in 2017, so the current text must be checked on each project.

G2G under the Invest Bangladesh Act 2026

The 2026 Act puts G2G on a statutory footing. It defines a G2G partnership as a partnership or venture, under a bilateral framework agreement, memorandum or cooperation arrangement between Bangladesh and another government, between Bangladesh or its nominated public body and the other government or its nominated entity, to implement a PPP project, another project, or an industrial project or zone.[1] It allows contracting authorities to take up G2G PPP projects by the prescribed procedure, and requires them to follow the rules made for G2G or other PPP processing.[1] The Act separately empowers the government to plan industrial zones in G2G partnership.[1]

G2G outside PPP: supply and EPC contracts

Not every G2G deal is a PPP. Government purchases with foreign state entities go to the Cabinet Committee on Government Purchase. On 29 July 2026, for example, that committee recommended importing refined fuel oil worth an estimated Tk 16,088.52 crore for July to December 2026 through G2G agreements with six state-owned suppliers from the UAE, China, India, Thailand and Indonesia.[5] Foreign-government-financed EPC contracts usually layer a framework agreement, a commercial contract and a loan agreement; each needs its own approval and dispute clause, and the three must work together.

PPP after the Invest Bangladesh Act 2026

For a decade the Bangladesh Public-Private Partnership Act 2015 was the anchor statute for PPP. That changed on 16 July 2026, when the Invest Bangladesh Act 2026 (Act No. 104 of 2026) was enacted; it came into force on 20 August 2026.[1] Section 66 repeals the Economic Zones Act 2010, the PPP Act 2015, the Bangladesh Investment Development Authority Act 2016 and the One Stop Service Act 2018, and dissolves the Economic Zones Authority, the PPP Authority and BIDA.[1] Our guide to PPP projects in Bangladesh covers the 2018 procurement, unsolicited-proposal and viability gap financing instruments in detail, and our note on the Invest Bangladesh Act 2026 covers the industrial-zone side.

What carried over

The core PPP architecture survives in Chapter 8 of the new Act, which begins at section 30. The Cabinet Committee gives in-principle and final approval of PPP projects (section 31), and no contracting authority may begin selecting a private partner without in-principle approval (section 36).[1] Unsolicited proposals are still permitted and assessed under guidelines (section 37); negotiation is limited to negotiable terms (section 38); and the PPP contract determines the legal relationship and risk allocation (section 39).[1]

The government may provide funds and government guarantees for technical assistance financing, viability gap financing, equity and loan financing, linked components and other approved activities (section 33).[1] The selected partner must form a company limited by shares, which takes over the partner's rights and obligations once the PPP contract is signed (section 41). The project company may levy tariffs, tolls, fees or charges under the contract, which must state the method and formula for fixing and adjusting them (section 46).[1]

What is new

The 2026 Act adds features the 2015 Act did not have. Small-scale PPP projects, defined by guidelines, can be approved by the line ministry or division instead of the Cabinet Committee (section 31).[1] With Cabinet approval, a project can be declared a national priority project and handled by an inter-ministerial committee for approval, partner selection and negotiation (section 32).[1] A bidder aggrieved by a contracting authority's order may appeal to the Authority within 30 working days, and the appeal decision is final (section 43).[1] Documents on prequalification, tendering, negotiation and approval are confidential unless the Right to Information Act 2009 provides otherwise, and may be disclosed only by court order or with the parties' consent (section 40).[1]

Transition: what to do with live PPP deals

The Act preserves acts already done under the repealed laws and treats pending proceedings as continuing under the new Act.[1] Rules and regulations made under the PPP Act 2015 remain in force until replaced, so far as they do not conflict with the new Act.[1] Sponsors with a project in the pipeline should confirm which body now holds the file, re-paper references to the "PPP Authority" and "PPP Act", and check whether each guideline relied on is a saved rule or a policy that may be reissued.

Infrastructure projects Bangladesh finances abroad: ECA, JICA, AIIB, ADB, World Bank and China

A large share of infrastructure projects Bangladesh builds is paid for by external lenders. In FY2025-26, development partners disbursed USD 8.07 billion while new commitments fell 37 per cent to USD 5.24 billion, and repayments reached a record USD 4.494 billion.[6] The World Bank disbursed USD 2.07 billion, the ADB USD 1.91 billion, Japan USD 795.32 million, the AIIB USD 693.13 million and China USD 532.88 million.[6] Falling commitments today mean a thinner pipeline of new foreign-funded packages over the next few years.

Whose procurement rules apply

On a loan-funded package the financing agreement, not only Bangladeshi law, decides how the contractor is chosen. The World Bank's Procurement Regulations state that the Legal Agreement governs the relationship between the borrower and the Bank, and that the Regulations apply as that agreement provides.[13] Other multilateral and bilateral lenders follow the same model with their own guidelines, standard bidding documents, eligibility rules, complaint procedures and sanctions regimes. A contractor bidding on such a package must read the loan agreement and the lender's rules as closely as the tender itself.

Multilateral, bilateral and export credit structures

Multilateral loans from the World Bank, ADB and AIIB are usually openly tendered, with the lender's environmental and social standards attached. Bilateral loans from Japan and China, and export credit agency cover for a home-country contractor or supplier, may carry nationality or content conditions, so the commercial contract and the loan agreement are often negotiated together. Either way, the loan agreement usually decides what the borrower may pay for, and when.

What the financing agreement does to your contract

Lender conditions reach into the EPC contract through eligible costs, payment currency, disbursement, anti-corruption and sanctions undertakings, audit rights, environmental and social plans, and suspension if the loan is suspended; a contractor should map each against its own obligations before signing. Foreign-currency payments, retention and guarantees also engage Bangladesh Bank's foreign exchange rules, discussed in our note on foreign loans to Bangladeshi borrowers.

Project development, procurement and financing: from concept to financial close

Project development is where most legal value is created or lost. Feasibility, approvals, land and finance must move together, and an approval obtained out of sequence is the most common reason a project restarts: PPP partner selection needs prior in-principle approval, and a G2G decision must precede bidding.[1] [2] The sequence below applies, with adjustments, to the public works, PPP and G2G infrastructure projects Bangladesh develops with private or foreign capital.

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The project company, finance and security

Sponsors of PPP and private infrastructure normally hold the project through a special purpose company incorporated in Bangladesh, as the 2026 Act requires for PPP.[1] Lenders will expect security over the project company's shares, accounts, receivables and contract rights, and direct agreements with the contracting authority giving step-in rights. The PPP contract may provide for security interests and termination terms, and may be drafted in the language the parties agree, notwithstanding other law.[1] Equity, shareholder loans and foreign debt each carry their own foreign-exchange registration and repatriation steps, which should be settled before financial close.

EPC and FIDIC contracts on Bangladeshi projects

Most large civil, power and transport packages use an engineering, procurement and construction (EPC) contract, a design-build contract, or a FIDIC-based form. Development-partner packages usually use the lender's standard documents, which are built on FIDIC conditions; national tenders use BPPA standard documents; G2G and private EPC contracts are negotiated, often from a FIDIC base. The choice of form decides who carries design risk, who certifies payment and how claims are made.

Choosing the form

FIDIC's Red Book suits employer-designed civil works certified by an Engineer, the Yellow Book suits contractor-designed plant, and the Silver Book is a turnkey EPC form that shifts most risk to the contractor. A Silver Book on a project where the employer controls the site, land handover and utility diversions is a recipe for claims, because the contractor is pricing risks it cannot manage.

Where Bangladeshi projects generate claims

The recurring claim drivers are late land handover, utility relocation, late design approvals, ground conditions, changes in law and tax, exchange-rate movement and late payment. Each needs a contractual answer: an access date with a remedy, a ground-risk baseline, a change-in-law clause covering VAT, customs and income tax, a payment currency matching the contractor's costs, and interest and suspension rights. Our note on unpaid Bangladesh infrastructure project claims explains how to build those claims once a dispute has begun.

Dispute boards

The 2017 FIDIC suites use a Dispute Avoidance/Adjudication Board under clause 21. The board must give its decision within 84 days of a reference unless a different period is agreed, and a party that disagrees must give a notice of dissatisfaction within 28 days, failing which the decision becomes final and binding.[14] A board decision is binding while it remains open to challenge, and failure to comply can be referred directly to arbitration.[14] On long Bangladeshi projects a standing board, appointed at the start and visiting the site, is usually worth its cost, because it resolves disputes before they reach a tribunal.

Land acquisition and environmental clearance

Land and environment are the consents that most often delay infrastructure projects Bangladesh plans on a fixed timetable. Neither is resolved by procurement, PPP or G2G approval, and both should be critical-path items and, unless priced, employer risks.

Land acquisition

Land for public infrastructure is acquired by the Deputy Commissioner under the Acquisition and Requisition of Immovable Property Act 2017. Compensation is market value plus an additional 200 per cent where land is acquired for a government purpose and 300 per cent where it is acquired for a private entity, with an additional 100 per cent on other heads of loss.[8] The process, timing and challenge routes are explained in our land acquisition guide. For contract purposes, the key point is that acquisition is a government function; under the G2G Policy, for example, land and resettlement are linked components delivered by the government unless the financing provides otherwise.[2]

Environmental clearance

Environmental clearance is issued by the Department of Environment under the Environment Conservation Rules 2023, which classify projects as Green, Yellow, Orange or Red according to their likely impact.[9] Most major infrastructure falls in the Orange or Red categories, which require site clearance and an environmental assessment before construction. Lender environmental and social standards usually go further, requiring resettlement plans, consultation and monitoring. Our note on environmental impact assessment in Bangladesh covers the process. PPP contracts must also respect labour, wage, health, safety and child-labour protections.[1]

Payment security on infrastructure projects

When only two-thirds of the revised development programme is spent in a year, contractors and suppliers must assume that budget releases, certificates and foreign-loan disbursements will sometimes run late.[7] Payment security has to be built into the documents at signing, because it cannot be negotiated once the money has stopped.

Tools that work

On public works, the strongest protection is a contract that fixes certification and payment periods, gives interest on late payment and allows suspension and, eventually, termination for non-payment, with each step tied to a clear notice. On foreign-financed packages, direct payment by the lender to the contractor removes one layer of budget risk. On PPP projects, the Invest Bangladesh Act allows government financial support and government guarantees, which should be documented in the PPP contract or a separate guarantee or implementation agreement.[1] Private offtake projects rely on letters of credit, escrow accounts and payment guarantees sized to several months of revenue.

Guarantees run both ways

Contractors give performance, advance payment and retention guarantees, and a demand guarantee generally cannot be stopped merely because the underlying contract is disputed. Our notes on whether a performance guarantee can be stopped and on bank guarantees in Bangladesh explain the narrow grounds on which courts intervene.

Disputes: dispute boards, arbitration and the Commercial Courts

Infrastructure disputes climb a ladder: the Engineer or adjudicator, then a dispute board if the contract has one, then arbitration or court. The ladder is often mandatory, and skipping a rung can cost a claim.

The statutory PPP ladder

For PPP, the ladder is in the statute. Section 42 of the Invest Bangladesh Act 2026 requires disputes on the application or interpretation of a PPP contract to be resolved first by mutual agreement, then through a neutral expert mediator, and then by arbitration between the PPP parties.[1] The contract may adopt national or international rules, but the arbitration is to be held in Dhaka unless, in special cases, the parties agree on another country. No party may go to a national or international court without first using this process, and the arbitral decision is final.[1]

Arbitration under the Arbitration Act 2001

Arbitration seated in Bangladesh is governed by the Arbitration Act 2001. Under section 7A, the High Court Division in an international commercial arbitration, and the court in other arbitrations, can make interim orders such as protective measures over goods or property before or during the proceedings and until the award is enforced.[10] An application to set aside an award under section 42 must be made within sixty days of receiving it, and foreign awards are enforced under section 45.[10] Our guides on the arbitration clause and on enforcing foreign awards go further.

The Commercial Courts

The Commercial Courts Act 2026, deemed effective from 1 January 2026, brings construction and infrastructure contracts and their tenders, as well as arbitration agreements, proceedings and awards under the Arbitration Act 2001, within the definition of commercial disputes.[11] It also lets the court give priority to suits involving development or infrastructure projects or significant investment.[11] For contracts without an arbitration clause, and for court applications in support of arbitration, this is now the forum to plan for.

Infrastructure lawyer services: how TRW supports a project

On infrastructure projects Bangladesh agencies tender or negotiate, TRW acts for sponsors, EPC contractors, subcontractors, lenders and public bodies across the full cycle: route selection and approvals, procurement and bid challenges, PPP and G2G structuring, EPC and FIDIC drafting, land and environmental diligence, finance and security documents, and then contract administration, claims, dispute boards, arbitration and enforcement.

Our construction claims and project disputes practice handles the contentious side, and our development finance and multilateral projects practice handles lender-funded structures.

Critical mistakes on infrastructure projects Bangladesh signs

The same errors recur across sectors and funding sources, and each is avoidable with early legal input. Two have already been covered: accepting land and consent risk on turnkey terms, and assuming national rules govern a lender-funded package. Three more deserve a separate warning.

Treating a memorandum as a contract

A G2G framework agreement or memorandum of understanding sets a procedure; it rarely gives a contractor or investor enforceable rights. Mobilising on the strength of a memorandum, before the commercial contract and the financing agreement are approved and signed, puts the whole investment at risk.

Relying on repealed law

Documents that still cite the PPP Act 2015, the PPP Authority or the 2010 power-sector special law are out of date. Approvals, signatories and dispute clauses should be checked against the Invest Bangladesh Act 2026 and the repeal of the 2010 Act.[1] [12]

Missing notice periods

Under FIDIC and most EPC forms, a late claim notice or a missed notice of dissatisfaction can extinguish an otherwise strong claim. A contract-wide notice calendar is cheap insurance.[14]

Projects that fix their legal route early, take approvals in sequence and build payment security and dispute machinery into the contract are the ones that finish on terms that hold. To discuss a project, bid or claim, contact TRW.

Frequently asked questions

Is the PPP Act 2015 still in force in Bangladesh?

No. Section 66 of the Invest Bangladesh Act 2026 repealed the Bangladesh Public-Private Partnership Act 2015 and dissolved the PPP Authority. The Act came into force on 20 August 2026, and PPP is now governed by its Chapter 8, with rules made under the old Act saved where they do not conflict.[1]

Who approves PPP projects in Bangladesh now?

The Cabinet Committee gives in-principle and final approval. Small-scale PPP projects defined by guidelines may be approved by the relevant ministry or division instead.[1]

What is a G2G infrastructure project?

It is a project carried out under a bilateral framework agreement or memorandum between Bangladesh and another government, which arranges finance and nominates a state-owned or private entity to deliver it. The Invest Bangladesh Act 2026 now defines G2G partnership, and the 2017 G2G Policy sets the procedure for G2G PPP projects.[1] [2]

Can a project switch to G2G after tendering has started?

Under the 2017 G2G Policy, the decision to use G2G must be taken before the bidding phase begins. Once an invitation for bid or request for qualification has issued, G2G is available only if that bidding fails.[2]

What changed in public procurement law in 2026?

The Public Procurement (Amendment) Act 2026, Act No. 41 of 2026, ratified the 2025 reforms. It made e-GP mandatory, introduced sustainable procurement, reverse auctions and framework agreements, and recognised physical services as a separate category.[3] [4]

Do Bangladeshi procurement rules apply to World Bank or ADB funded contracts?

The financing agreement decides. The World Bank's Procurement Regulations apply as the legal agreement with the borrower provides, and other lenders use the same model with their own rules and standard documents.[13]

How are PPP disputes resolved in Bangladesh?

Section 42 of the Invest Bangladesh Act 2026 requires mutual agreement first, then a neutral expert mediator, then arbitration seated in Dhaka unless the parties agree on another country in special cases. Parties may not go to court before using this process, and the arbitral decision is final.[1]

Do the Commercial Courts hear construction disputes?

Yes. The Commercial Courts Act 2026 includes construction and infrastructure contracts, and related tenders, among commercial disputes, and allows the court to prioritise suits involving development or infrastructure projects.[11]

How much compensation is paid when land is acquired for a project?

Under the Acquisition and Requisition of Immovable Property Act 2017, market value plus an additional 200 per cent for government purposes or 300 per cent for a private entity, with an additional 100 per cent on other heads of loss.[8]

How long do I have to challenge an arbitral award on a project dispute?

An application to set aside an award under section 42 of the Arbitration Act 2001 must be made within sixty days of receiving the award.[10]