Power and Energy Law in Bangladesh 2026: BERC, Power Contracts and Energy Deals

Energy law Bangladesh: the 2026 framework for power and energy

Energy law Bangladesh investors, lenders and industrial users deal with in 2026 looks very different from the regime of five years ago. The special powers statute that let the state award power and energy projects without competitive tender has been repealed and replaced by a validating Act of Parliament. The Bangladesh Energy Regulatory Commission has recovered its exclusive authority over tariffs. A national review committee has reported on the contracts signed during the special powers era, and a new Renewable Energy Policy, revised net metering rules and a fresh offshore bidding round have reset the commercial terms for new projects.

This guide sets out the framework as at 20 October 2026: BERC licensing and tariffs, the Electricity Act 2018, the repeal of the 2010 special provisions law, independent power producer structures, renewables and net metering, and the gas and mineral framework, with a practical transaction sequence.

Summary: Power and energy activity in Bangladesh is regulated by the Bangladesh Energy Regulatory Commission, which licenses generation, transmission, distribution, supply and storage and sets tariffs after public hearing. The Electricity Act 2018 governs operations, civil works and offences. Since the repeal of the 2010 special provisions law, new generation capacity is procured through open tender, and contracts signed under that law remain valid but open to government review.

Key point: The Quick Enhancement of Electricity and Energy Supply (Special Provisions) (Repeal) Act 2026, passed on 10 April 2026, takes effect from 28 November 2024. Contracts signed under the 2010 Act are deemed validly made and continue as if the Act had not been repealed, but the government expressly reserves the right to review anything done under it and to act in the public interest.

At a glance

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Table of Contents

How energy law Bangladesh applies is structured in 2026

The legal framework for power and energy rests on a small number of statutes, each with a distinct job. The Bangladesh Energy Regulatory Commission Act 2003 (Act No. 13 of 2003) creates the regulator, makes licensing compulsory and governs tariffs and regulatory disputes.[2] The Electricity Act 2018 (Act No. VII of 2018) replaced the Electricity Act 1910 and governs how licensees build, operate and protect the network, and how electricity offences are punished.[1] The Bangladesh Gas Act 2010 regulates gas transmission, distribution, CNG, LPG and LNG business and gas theft.[13] Upstream oil and gas is governed by petroleum agreements, typically production sharing contracts with the state.[14]

Policy sits with the Ministry of Power, Energy and Mineral Resources, which may issue policy directives in consultation with the Commission.[2] In practice, policy decides what gets built, the regulator decides who may operate and at what price, and the contract decides how risk is shared.

The main institutions

Most transactions involve the same public bodies, and knowing which holds which power is the first step in any project.

Why the statutory layering matters

The statutes overlap. The Electricity Act 2018 defines a licensee as a person licensed under the BERC Act and sends disputes about power supply or use to the BERC Act's dispute machinery, and both statutes claim overriding effect.[1] That is why energy law Bangladesh practitioners always read the licence, the statute and the contract together.

BERC Act 2003: licensing and regulation

The Bangladesh Energy Regulatory Commission is a statutory body with a chairman and four full-time members appointed by the President, headquartered in Dhaka.[2] Its functions under section 22 include issuing, cancelling and amending licences and setting licence conditions, determining tariffs, approving licensee schemes against load forecasts, framing codes and standards, promoting competition among licensees and resolving disputes between licensees and between licensees and consumers.[2]

Who needs a licence

Section 27(1) is the gateway provision. No person may engage in power generation, energy transmission, energy distribution and marketing, energy supply or energy storage unless licensed or exempted under the Act or another Act.[2] Section 28 lets the Commission issue licences for each of those activities, and section 29 lets it exempt persons by regulation, for a specified period and on conditions, with the power to revoke an exemption on recorded reasons.[2] Where it is unclear whether an activity falls within section 27, the Commission's decision is final, and it can order an unlicensed operator to disconnect or stop its machinery.

Restrictions that affect deals and financing

Section 32 is the provision that most often surprises investors. A licensee may not acquire any undertaking without the Commission's prior written permission, and must give thirty days' notice before applying. More importantly for lenders, a licensee may not sell, mortgage, lease, exchange or otherwise transfer its undertaking or any part of it without the Commission's prior permission.[2] A share sale, an asset transfer or the creation of security over a power plant therefore needs a regulatory step that must be built into the timetable and the conditions precedent.

Regulatory disputes and arbitration

Section 40 provides that disputes between licensees, or between licensees and consumers, are referred to the Commission notwithstanding the Arbitration Act 2001. The Commission may decide the dispute itself or appoint an arbitrator, and its award or order is final and enforceable as a civil court decree.[2] Contracts executed with the government or its agencies before the Act came into force keep their own dispute terms. For new projects, sponsors need to align the power purchase agreement dispute clause with section 40 and decide which disputes go to the Commission and which go to commercial arbitration.

Tariff setting: section 34, the section 34A episode and the 2026 position

Section 34 requires the price of power at wholesale, bulk and retail level, and the price of energy supplied to end users, to be determined under the Commission's policy and methodology. The Commission must hear licensees and other interested persons before fixing a tariff, and may not revise a tariff more than once in a fiscal year unless energy prices change.[2] Tariffs fixed by agreements with private companies before the Act came into force are carved out.

How the government took and lost tariff power

The BERC (Amendment) Act 2023, dated 31 January 2023, inserted section 34A, which allowed the government, in special cases and by gazette notification, to fix, refix or adjust tariffs at every level of the energy chain. The same Act shortened the Commission's decision window on a licensee's tariff proposal from ninety to sixty days and added a proviso to section 34(3).[3] On 27 August 2024 the interim government omitted section 34A by the BERC (Amendment) Ordinance 2024 (Ordinance No. 07 of 2024).[4]

The elected Parliament then confirmed the change. The BERC (Amendment) Act 2026 (Act No. 40 of 2026), dated 10 April 2026, omits section 34A, repeals the 2024 Ordinance and treats anything done under the Ordinance as done under the amended Act.[4] The 2026 Act did not touch the other 2023 changes, so the sixty-day decision window remains in the statute. Tariff changes once again require a public hearing before the Commission, which is the single most important protection for consumers and the single most important process risk for licensees seeking increases.

The June 2026 tariff round

The first retail tariff round under the elected government shows the process at work. After public hearings on utility proposals, BERC announced increases on 3 June 2026, including higher lifeline rates. On 4 June 2026 it withdrew the increase for residential customers using up to 75 units a month, keeping the lifeline rate at Tk 4.63 and the first-step rate at Tk 5.26, and the average retail tariff settled at Tk 10.40 per unit from the June billing cycle.[12] For industrial users, the lesson is to model tariff resets annually and to take part in hearings that affect cost of production.

Electricity Act 2018: operations, network rights and offences

The Electricity Act 2018 came into force on 12 February 2018, repealing and re-enacting the Electricity Act 1910.[1] It is the operational statute: it tells a licensee what it may do on the ground and what protection it enjoys.

System operation and civil works

Section 5 of the Electricity Act 2018 requires the government to establish an independent system operator by gazette notification, to monitor transmission flows, prepare schedules and allocate load according to merit order dispatch.[1] Chapter III gives licensees powers to lay supply lines and carry out civil works, subject to permissions and compensation for damage. Section 13 gives a licensee a right of way over land for laying lines, provided it informs the landowner in writing first, and section 14 deals with land acquisition for licensees, including private licensees that need land for a power station.[1]

Arrears, offences and emergency powers

Under the Electricity Act 2018, arrears of electricity charges are recoverable as a public demand under the Public Demands Recovery Act 1913, notwithstanding any contract, and the Act creates offences for theft, meter tampering and illegal supply.[1] The government may declare an emergency at a generation, transmission or distribution establishment to keep supply uninterrupted, and may declare the service of power sector employees an essential service under the Essential Services (Maintenance) Act 1952.[1] Project agreements should address how these powers interact with force majeure and change-in-law clauses.

The end of the special provisions regime

For fourteen years the Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 (Act No. 54 of 2010) allowed power and energy projects to be awarded through a fast-track process outside the ordinary procurement rules, and many generation projects of that period were unsolicited.[11] The High Court Division struck down sections 6(2) and 9, and the interim government repealed the Act by an ordinance gazetted on 28 November 2024.[6]

The Repeal Act 2026 and its savings clause

Parliament replaced the repeal ordinance with the Quick Enhancement of Electricity and Energy Supply (Special Provisions) (Repeal) Act 2026 (Act No. 18 of 2026), dated 10 April 2026 and deemed effective from 28 November 2024. It repeals the 2010 Act and Ordinance No. 15 of 2024. Section 2(2) provides that contracts executed under the 2010 Act, and steps taken under them, are deemed validly made; that ongoing work under those contracts continues as if the Act had not been repealed; and that the government nevertheless reserves the right to review any activity under the Act and take any action in the public interest.[5]

That three-part formula is now the key energy law Bangladesh test for every existing contract: statutory confirmation of validity, but no immunity from review. Lenders and acquirers should diligence any asset contracted under the 2010 Act on the assumption that its tariff and terms may be reopened.

What happened to projects in the pipeline

Unsigned projects lost their route to market. The Bangladesh Power Development Board terminated letters of intent for 34 solar plants approved under the 2010 Act, after the Power Division ordered the cancellation, and plants that hold a letter of intent but no signed implementation agreement, power purchase agreement or land lease must now go through open tender.[6] Several developers filed writ petitions, and the High Court Division issued rules on the government.[6] Holders of unsigned awards should take advice on both the writ position and re-tendering.

Energy contracts review committee findings

The interim government formed a National Review Committee on 5 September 2024 to examine power and energy contracts signed under the 2010 Act. It submitted its final report on 20 January 2026, with one report on the Adani contract and another on the wider portfolio.[7]

Findings on the wider portfolio

The committee found that generation capacity had risen fivefold over fifteen years while payments to private plants rose elevenfold, that between 7,700 MW and 9,500 MW of capacity was unused, and that capacity payments for idle plants ran at between US$900 million and US$1.5 billion a year.[7] It reported prices 40 to 50 per cent higher than benchmarks for furnace-oil plants, around 45 per cent higher for gas plants and 70 to 80 per cent higher for solar, and found that contracts guaranteed private returns for twenty to twenty-five years while shifting fuel, currency and capacity risk to the state.[7]

The Adani contract

On the Adani Godda contract the committee reported a contract price of 8.61 US cents per unit at a time when other imported Indian power cost 4.46 cents, an excess estimated at US$400 to 500 million a year, irregularities in site selection, pricing and contract terms, and a clause leaving Bangladesh liable for losses from causes internal to India.[7] It recommended revising power purchase agreements signed under the special law, starting with Adani, and deciding promptly on arbitration in Singapore. The findings were shared with the Anti-Corruption Commission.[7]

Separately, in November 2025 a High Court Division bench ordered Adani not to proceed with arbitration in Singapore pending investigation, on a writ challenging the agreement, while the Anti-Corruption Commission examined duty and tax exemptions granted under it.[8] The episode illustrates a recurring tension in energy law Bangladesh disputes: a foreign-seated arbitration clause in a power purchase agreement, and domestic courts asked to restrain it on public-interest grounds. Our guide to international commercial arbitration in Bangladesh explains how seat and enforcement interact.

IPP and power purchase agreement structures under energy law Bangladesh practice

Private generation in Bangladesh has traditionally followed a build-own-operate independent power producer model, with the Bangladesh Power Development Board as offtaker under a long-term power purchase agreement. The power purchase agreement was backed by an implementation agreement with the government, which functioned as the government support undertaking that made projects bankable.[11] The national review committee's criticism was aimed less at this architecture than at how risk was allocated within it and how projects were awarded.[7]

The core project documents

• Power purchase agreement: tariff, usually split into a capacity payment for availability and an energy payment for output; dispatch; metering; liquidated damages; termination payments; and dispute resolution.
• Implementation agreement: government support, including undertakings on consents, tax treatment, foreign exchange and buy-out on termination.
• Fuel supply or gas supply agreement: for thermal plants, the allocation of fuel availability and price risk, which the review committee identified as a major source of state exposure.
• Land lease: particularly for solar on public-agency land.
• Licence and consents: the BERC generation licence, environmental clearance from the Department of Environment and local permits.

The post-2024 model: tender without an implementation agreement

The interim government decided not to sign implementation agreements for the new tendered solar projects. Instead, the Bangladesh Power Development Board undertook to buy power for at least ten to twenty years, with no contract to be cancelled before ten years.[11] Between December 2024 and March 2025 it tendered four packages covering 55 grid-connected solar plants with a combined capacity of 5,238 MW. The bids averaged 8.27 US cents per kWh, against an average solar generation cost of 13.29 cents, with the lowest bid at 7.49 cents.[11] Analysts warned that without a sovereign-backed implementation agreement some developers would find financing harder.[11] Each new power purchase agreement therefore needs closer scrutiny.

Clauses that decide bankability

Without an implementation agreement, the power purchase agreement has to carry more weight. Lenders will focus on the termination regime and compensation formula, change in law, payment security and late-payment interest, currency convertibility and transfer, step-in rights through a direct agreement with the offtaker, and the dispute clause, including its interaction with section 40 of the BERC Act. Each security interest over the plant also needs the Commission's prior permission under section 32.[2] For foreign borrowing and sponsor funding, our analysis of foreign loans into Bangladesh covers the exchange control side.

The table below compares the main routes into the Bangladeshi power market in 2026. On a phone, scroll it sideways.

Public-private partnership structures are also available for some infrastructure, and our guide to PPP projects in Bangladesh covers that route. TRW's power and electricity projects practice advises sponsors, lenders and offtakers on each structure.

Renewable energy policy 2025, net metering and SREDA

The government published the Renewable Energy Policy 2025 in June 2025, the first revision in seventeen years. It targets at least 20 per cent of national power demand from renewable sources by 2030, against renewable capacity of about 1,563 MW at the time of publication.[9] The Renewable Energy Policy 2025 offers renewable producers a ten-year corporate tax exemption followed by five years of partial exemption, prioritises land with no agricultural value, encourages agri-voltaic projects, and contemplates projects on fallow, khas, char, riverside and coastal land.[9]

SREDA's role

The Sustainable and Renewable Energy Development Authority is the nodal agency. Under the Renewable Energy Policy 2025 it will introduce a renewable purchase obligation and tradable certificates, each representing one MWh, and the policy permits peer-to-peer trading and solar mini-grids, with BERC setting the mini-grid distribution tariff.[9]

Net metering after the 2025 revision

Net metering lets residential, commercial and industrial consumers install rooftop or on-site systems and export surplus power to the grid. The revised net metering guidelines approved in 2025 allow systems sized up to 100 per cent of a consumer's sanctioned load, up from 70 per cent; open net metering to single-phase consumers and to prepaid and smart meter users; introduce online applications; and pay exporters directly in taka into bank or mobile banking accounts.[10] For factories, net metering is now a realistic way to reduce grid costs, provided the installation contract, roof rights and any third-party financing are documented properly.

Rooftop and captive projects still need careful structuring. A third-party owner selling power to a factory may itself be carrying on a licensable activity under section 27, unless an exemption applies.[2] Our renewable energy projects practice advises on these structures, and our guide to environmental law in Bangladesh covers the clearance side.

Gas, LNG, coal and minerals: the natural resources framework

Gas remains the backbone of generation and industry. Its framework has two layers: upstream production sharing contracts with the state, and downstream transmission, distribution and sale under the Bangladesh Gas Act 2010 and BERC licensing, with Petrobangla at the centre of both.

Upstream: the 2026 offshore bidding round

Petrobangla launched the Offshore Bidding Round 2026 on 24 May 2026, offering 27 Bay of Bengal blocks, 12 shallow-water and 15 deep-water, with bids due by 30 November.[14] The model production sharing contract prices deep-water gas at 11 per cent of the prevailing international oil price within a band of US$7.5 to US$11 per MMBtu, caps shallow-water gas at US$10.5 per MMBtu, limits annual cost recovery to 75 per cent, and gives Petrobangla a profit share of 40 to 65 per cent in shallow water and 35 to 60 per cent in deep water.[14]

Contracts run for 25 years for gas and 20 years for oil, each extendable by ten years, and BAPEX takes a mandatory 10 per cent stake in shallow-water blocks.[14]

Downstream: the Gas Act and the 2026 amendment

The Bangladesh Gas (Amendment) Act 2026 (Act No. 52 of 2026), dated 10 April 2026, replaced an ordinance of the same year and sharply increased penalties for illegal gas use. Industrial, captive power, CNG and tea garden consumers face up to one year's imprisonment or a fine of up to Tk 2 lakh, and power and fertiliser consumers up to two years or Tk 4 lakh, with higher minimum terms for repeat offences.[13]

The amendment also makes owners of the premises, contractors and distribution company staff liable for aiding illegal use unless they prove lack of knowledge or due diligence, requires blacklisting of convicted contractors, and removes the requirement that the government consult the Commission before making rules under the Gas Act.[13] Industrial users with captive generation should audit connection approvals and load limits now.

LNG, coal and minerals under energy law Bangladesh rules

Imported LNG supplements domestic production, and LNG business is one of the activities the Gas Act regulates, so LNG supply and gas sales to industry sit under both contract and licensing control.[13] Coal and other minerals fall under separate mining legislation, with environmental clearance an additional gate for any extraction project. Our guide to environmental impact assessment in Bangladesh explains that process.

Energy transactions: a practical sequence

Whether the deal is a new solar plant, the acquisition of an operating IPP or captive generation for a factory, the same sequence applies to energy law Bangladesh transactions.

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Regulatory consents under the BERC Act are conditions precedent, not formalities, and any asset with a history under the 2010 Act needs a separate review-risk analysis.[5] Corporate set-up for the project company is covered in our guide to energy company registration in Bangladesh.

What an energy lawyer does on Bangladeshi power and energy deals

Energy law Bangladesh work sits at the intersection of regulation, project finance, public law and disputes. The value of specialist advice lies in seeing how a change in one layer moves risk in another.

Sponsors, lenders and investors

For developers we advise on tender strategy, BERC licensing, power purchase agreement and land lease negotiation and the structuring of the project company. For lenders and acquirers we run regulatory due diligence, review termination compensation, take the section 32 consent for security and assess exposure to the government's reserved review rights.[5]

Industrial users and disputes

For industrial users we advise on gas connection compliance after the 2026 amendment, rooftop structures under net metering and BERC tariff hearings. Where contracts are reopened, the choice between renegotiation, BERC proceedings, domestic litigation and international arbitration is strategic. Our guide to unpaid infrastructure project claims covers recovery against public counterparties.

Energy law Bangladesh: what to watch in 2026 and beyond

Four developments will shape energy law Bangladesh practice over the next year. First, the government's response to the national review committee's report, including any renegotiation of capacity payments or termination of individual power purchase agreements and the outcome of the Adani proceedings.[7] [8] Second, the shape of the Renewable Energy Policy 2025's renewable purchase obligation and certificates once SREDA issues the detail.[9] Third, the result of the 2026 offshore bidding round after bids close on 30 November.[14] Fourth, the next BERC tariff cycle, now firmly in the regulator's hands after the 2026 amendment.[4]

For any power or energy project, the earliest structuring decisions carry the most weight: the procurement route, the licence, the security package and the dispute clause. If you want a clear view of your options, contact TRW.

Frequently asked questions

Who regulates the power and energy sector in Bangladesh?

The Bangladesh Energy Regulatory Commission, established under the BERC Act 2003, licenses generation, transmission, distribution, supply and storage, sets tariffs and resolves disputes between licensees and consumers. Policy rests with the Ministry of Power, Energy and Mineral Resources.[2]

Do I need a licence to generate electricity in Bangladesh?

Yes, unless an exemption applies. Section 27 of the BERC Act 2003 prohibits power generation, energy transmission, distribution, supply and storage without a licence or an exemption granted under the Act or another law.[2]

Can the government still set electricity prices without BERC?

No. Section 34A, which allowed the government to fix tariffs by notification, was omitted by an ordinance in August 2024 and the omission was confirmed by the BERC (Amendment) Act 2026. Tariffs are set by BERC after public hearing.[3] [4]

Was the Quick Enhancement of Electricity and Energy Supply Act 2010 repealed?

Yes. It was repealed by ordinance in November 2024, and the Repeal Act 2026 (Act No. 18 of 2026) confirms the repeal with effect from 28 November 2024.[5]

Are power contracts signed under the 2010 Act still valid?

Yes. The Repeal Act 2026 deems them validly executed and lets ongoing work continue, but reserves the government's right to review any activity under the 2010 Act and take action in the public interest.[5]

What did the national review committee find about power contracts?

Its January 2026 final report found large unused capacity, capacity payments of US$900 million to US$1.5 billion a year for idle plants, above-benchmark prices and contracts that shifted fuel, currency and capacity risk to the state. It recommended revising contracts, starting with Adani.[7]

How are new solar power projects awarded in Bangladesh?

Through open tender. Unsigned awards from the special provisions era must go through competitive bidding, and the Bangladesh Power Development Board's 2025 tender rounds produced an average bid of 8.27 US cents per kWh.[6] [11]

What does the Renewable Energy Policy 2025 offer investors?

A target of at least 20 per cent of demand from renewables by 2030, a ten-year corporate tax exemption followed by five years of partial exemption, and a planned renewable purchase obligation with tradable certificates.[9]

How does net metering work in Bangladesh?

Consumers install rooftop or on-site systems, export surplus power and are paid in taka. Since the 2025 revision, systems may be sized up to 100 per cent of sanctioned load and single-phase and prepaid meter users can join.[10]

Can a power plant be mortgaged to lenders in Bangladesh?

Yes, but a licensee may not sell, mortgage, lease or transfer its undertaking or any part of it without BERC's prior permission under section 32 of the BERC Act 2003, so the consent must be built into the financing timetable.[2]