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30pc power from renewables by 2040

Says Finance Adviser in FY26 budget speech


FE REPORT | June 03, 2025 00:00:00


The government has decided to generate 30 per cent of the country's total electricity from renewable sources by 2040.

An Integrated Power Sector Master Plan (IPSMP) has already been prepared, and under it, a target has been set to generate 3,400 MW of electricity from clean sources by 2028, Finance Adviser Dr Salehuddin Ahmed said while unveiling the FY26 national budget on Monday.

The process of formulating a new policy by updating the Renewable Energy Policy 2008 is at its final stage, he said.

The government has proposed an allocation of Tk 225.20 billion for the power and energy sector in the budget, reflecting a 25.71 per cent decrease from the Tk 303.17 billion allocated in FY25.

The proposed FY26 allocation is also 0.81 per cent lower than that in the revised budget for FY25, which stood at Tk 227.04 billion.

This marks the second consecutive year that the power and energy sector has seen a cut in overall budgetary allocations.

In its final budget for FY25, the ousted Awami League government had reduced the sector's allocation by 12.93 per cent from FY24, when the sector received Tk 348.19 billion.

To meet the growing demand for refined oil, a project is taken to establish Eastern Refinery Limited (ERL), Unit-2, which will have the capacity to refine 3.0 million metric tonnes of crude oil every year.

Besides, about $570 million in arrears for imports has been paid to ensure a steady supply of fuel oil.

Vehicle Tracking System devices using SFDMS technology have been installed in 2,465 fuel oil tank lorries across the country to ensure transparency and safety in the fuel transportation system.

This will reduce the risk of theft or adulteration during the transportation of fuel, the finance adviser said.

At the same time, it will enable better management of fuel transport through real-time monitoring of the movement and activities of these vehicles.

The Quick Enhancement of Electricity and Energy Supply (Special Provisions) Act 2010 has been repealed to ensure transparency and accountability in the power sector, Dr Ahmed said.

A national committee has been formed to review the agreements previously executed under the act and make recommendations.

In addition, a separate committee has been formed to review the tariff structures of the purchase agreements, re-negotiate them, and make recommendations, he added.

As part of modernising the power distribution system, work is underway to place distribution lines and substations underground in metropolitan areas.

This initiative will make the power distribution system more stable and efficient.

Furthermore, an agreement under sub-regional cooperation was signed with Nepal on October 3, 2024.

Under this agreement, 40 MW of hydropower will be imported at an affordable price to meet the electricity demand during summer.

The construction of the 2,400 MW Rooppur Nuclear Power Plant is progressing rapidly, the adviser said.

"We hope that it will be possible to supply electricity from this plant to the national grid by December of this year," he said.

To ensure energy security, the government has taken initiatives to increase oil and gas exploration and production through its own efforts.

Accordingly, BAPEX has planned to carry out a 270 km geological survey, a 700 km 2-D seismic survey, and a 700 square km 3-D seismic survey between FY26 and FY28.

In the medium term, BAPEX has planned to drill 69 wells and complete the work-over of 31 wells using its own rigs.

At the same time, steps are being taken to develop cost-effective and sustainable infrastructure to help control energy prices, said the finance adviser.

Azizjst@yahoo.com


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