Back in the days, the darkness of night brought life in Bangladesh’s rural areas to a standstill. During 1996 to 1998, only 12.9 percent of rural households had access to electricity connections. Children struggled to study by the feeble glow of kerosene lamps, which led to eye strains. Women had to complete their household chores before nightfall. Without electricity, opportunities for economic advancement were severely limited.
Rural Population Under Electricity Coverage
Three-fold Increase in Electrification Rate
Over the last decade
Five-fold Increase in Generation Capacity
Since 2011-12
But with time and efforts, the situation has improved to a significant extent despite challenges. Bangladesh has made remarkable progress in increasing its power generation capacity, which has grown nearly five-fold since 2010-2011, reaching 25,000 megawatts. Consequently, access to electricity has expanded significantly, with a three-fold electrification rate increase over the past decade. According to the World Bank data, 98.54 % rural population in Bangladesh had access to electricity in 2021. On the other hand, the GoB has announced 100% electrification on 21st March 2022.
Growth Due to the Electrification in Rural Areas
Currently, the country has experienced substantial economic growth despite challenges, with per capita income rising from $750 to $2,900. The rural economy has also flourished, expanding from BDT 7,000 billion to BDT 25,000 billion over the past decade.
81% Reduction in Kerosene Consumption
By households
2.21 Hours Increase in Working Hours
Per week
21 Minutes Increase in Students' Study Time
Per day
Electrification has also led to an 81% reduction in household kerosene consumption. Additionally, it has increased weekly working hours by 2.21 hours and extended students’ evening study time by 21 minutes per day.
As the economy of Bangladesh is growing, the country is increasingly becoming industrialized. As a result, smallholder farms are facing challenges. Previously, due to shortage of electricity production, the government would have to choose between industrial electricity supply and rural electricity supply. As a result, industries were provided electricity at the cost of hampering rural agriculture and smallholder farms. Even though supply of electricity could be ensured to a significant extent, the smallholder farms should be provided sufficient government support in order to protect them.
Bangladesh’s production of food grains, fish, meat, eggs, milk, fruits, and vegetables has multiplied over the past decade, which contributed to reducing hunger in the country. In 2008-09, the small fish production stood at 67,000 tonnes, but it had reached 250 thousand tonnes by 2022. Various fish varieties are being cultivated. The number of hatcheries has increased from around 100 to approximately 1,000 in the past decade.
The investment in the poultry sector has risen from approximately BDT 100 – BDT 120 billion to BDT 350 billion – BDT 400 billion. Bangladesh has become self-sufficient in egg production and is on its way to achieving self-sufficiency in beef production. There are more than 2 million poultry farms, employing at least 50,000 people. The government has over 50,000 farms under its “One House, One Farm“ project.
The domestic cable market has also grown from BDT 20 billion to BDT 120 billion in the last decade. This growth is attributed to Bangladesh’s hardworking rural population and policy support they have received.
Bottlenecks
While the electricity access rate reached 100% in 2021, only around 11 percent of grid-connected households are in tier 4 and 5, receiving more than 16 hours of daily supply. Similarly, merely 11 percent of off-grid households are in Tier 3, getting more than eight hours of supply.
11% of Households with 16+ Hours Electricity Supply
Grid-Connected households
11% of Households with 8+ Hours Electricity Supply
Off-grid households
The main challenge is still the evening availability of power supply, impacting approximately 70 percent of rural households and 73 percent of urban households.
The second biggest problem is the unreliability of supply, compelling people to depend on fossil fuel-based backup systems. The quality of energy service is also a significant concern in both rural and urban areas. Reliability and quality issues have led to a decrease in the consumption share of commercial and industrial customers over the years.
Decrease in Commercial and Industrial Supply
Due to reliability and quality issues
Tariffs are not Cost-reflective
Bulk tariff lower than generation cost
Even though there is an electricity regulator, tariffs are not cost-reflective. The bulk supply tariff is lower than the average generation cost. Consequently, the Bangladesh Power Development Board (BPDB) incurred a loss of around BDT 1.00 per kilowatt-hour produced in the fiscal year 2020, amounting to a total loss of approximately BDT 620.5 billion. The BPDB acts as a single buyer and holds a major stake in other power sector entities. Moreover, the Government of Bangladesh’s subsidies have been insufficient to cover its losses.
64% of Total Generation Capacity
Came from natural gas in 2020
40% of Total Generation Capacity
Planned to be renewable by 2041
Capacity Payments
To idle plants with backdated technology
Domestic natural gas, the backbone of Bangladesh’s power sector, is depleting rapidly and may be exhausted within the next five to six years. In 2020, roughly 64 percent of the total generation capacity came from natural gas. With less gas allocated to the power sector than required, the government must make substantial capacity payments to idle plants. As a significant portion of the thermal power plant fleet operates on older and inefficient technology, both the public and private sectors need to make significant efforts to use gas more efficiently. The government has set a goal to generate 40 percent of electricity from renewable energy sources by 2041. But related policies are still being crafted.
The Path to Achieving Complete Electrification across Rural Areas
Rural electrification is vital for developing nations like Bangladesh to provide energy access in rural areas. Bangladesh’s first major rural grid electricity initiative, as an independent nation, was the ‘Total Electrification Programme’ in 1975, under Bangabandhu Sheikh Mujibur Rahman’s administration.
The Rural Electrification Program began in 1978, with technical support from USA’s National Rural Electrification Cooperative Association, to deliver electricity to rural Bangladesh. The main focus of the program was the electrification of dry season irrigation to boost Bangladesh’s rural agricultural sector.
Bangladesh Rural Electrification Board was established to implement rural electrification. For over 45 years, BREB has successfully provided power to rural consumers through ‘Palli Bidyut Samities’. Rural Electrification Board (REB) ensured the construction of 1,22,25,103 new connections and 2,83,448 kms of line till date.
5613 MW Installed Capacity of BPDB
As of January 2020
Supply to 3000 Rural Households
Through photovoltaic system
The Bangladesh Power Development Board (BPDB) is a government agency under the Ministry of Power, Energy and Mineral Resources. It was created in 1972 after Bangladesh’s independence to boost the power sector. BPDB is the parent company of several power generation and distribution companies like Ashuganj Power Station Company Ltd, Coal Power Generation Company Bangladesh Limited, Power Grid Company of Bangladesh, Electricity Generation Company of Bangladesh, North West Power Generation Company Limited etc. It is responsible for a large part of the country’s total electricity demand. As of January 2020, BPDB had 5613 MW installed capacity at its own power plants nationwide. Its plants mainly use natural gas for power generation. BPDB has provided electricity through photovoltaic systems to over 3,000 rural households.
Infrastructure Development Company Limited (IDCOL) promotes solar home system dissemination in remote rural Bangladesh through its Solar Energy Program. It receives financial support from the World Bank, Global Environment Facility, KfW, GIZ, Asian Development Bank, USAID, and Islamic Development Bank. IDCOL started the program in January 2003, initially targeting 50,000 SHS installations by June 2008. This target was achieved in September 2005, 3 years ahead of schedule and $2 million below estimated cost. IDCOL then revised its target to 1 million systems by 2012, which was also achieved ahead of schedule by June 2011. By August 2012, over 1.6 million SHS were already installed under the program. IDCOL installed 4.13 million Solar Home Systems till January 2019.
IDCOL implements through 30 partner organisations. The solar PV growth market improves life quality through electricity access. IDCOL aimed to install 5 million ICS by 2023. Therefore, the organisation implemented around 83,000 ICS installations per month to achieve the target. It creates additional income, generates rural activities, promotes local entrepreneurs, creates rural jobs for skilled and unskilled people, promotes domestic industries, and reduces carbon emissions.
Grameen Shakti (GS) is a renewable energy social enterprise established in 1996. It aims to promote and popularise renewable energy technologies in remote rural areas of Bangladesh. GS was enlisted as a Partner Organization of the Infrastructure Development Company Limited (IDCOL) in 2003. By 2007, Grameen Shakti had installed over 110,000 solar home systems in rural Bangladesh, which increased to 1.8 million by 2020. Till date, Grameen Shakti has installed more than 2.4 million SHS. This accounts for 33 percent of global installations and 40 percent of national installations in Bangladesh. These installations have benefited a total of 12 million people.
In February 2000, the then Sheikh Hasina administration of Bangladesh set a Vision Statement that aimed to provide access to affordable and reliable electricity to all by the year 2020. Under this vision, per capita electricity consumption rised from 110 kWh to 378 kWh during this period.
Increased from 100 kWh to 378 kWh
Per Capita Electricity Consumption
This Vision Statement also included a Policy Statement on Power Sector Reforms, which the GoB updated in 2008 with a three-year road map (2008–2010). To support the vision, the policy statement included nine objectives:
- Bring electricity service to the entire country by 2020.
- Make the power sector financially viable and able to facilitate economic growth.
- Increase the sector’s efficiency.
- Commercialise the sector.
- Improve the reliability and quality of electricity supply.
- Use natural gas as the primary fuel to generate electricity and explore the possibility of exporting power to augment and diversify foreign exchange earnings.
- Increase private sector participation to mobilise finance.
- Ensure a reasonable and affordable electricity price by pursuing least cost options.
- Promote competition.
The clear Vision Statement and Policy Statement have provided sufficient direction to drive the implementation of reforms, resulting in benefits for the power sector and the citizens of Bangladesh.
$13.95 Million Grant
For off-grid Bangladesh areas
Subsidy Decreased from $50 to $20
For smaller setups
2.2 Million
People benefitted
In 2010, a $13.95 million grant came from Global Partnership on Output-Based Aid. It aimed to improve electricity access for poor rural households in off-grid Bangladesh areas. This was part of a larger solar home system program. It began in 2003 with World Bank’s Rural Electrification and Renewable Energy Development project support. The project surpassed initial targets and had positive rural household outcomes. Originally, it planned to install 315,000 solar home systems benefiting 1.4 million people. As subsidies per system decreased from $50 to $20 for smaller setups, around 497,608 systems could be installed benefiting over 2.2 million.
The Rural Electrification and Renewable Energy Development Project (RERED) was taken up in May, 2009 under the Energy sector of Bangladesh. This project was worth $1.1 million. The RERED project has employed an output-based approach to enhance electricity access in rural areas throughout Bangladesh. The project facilitated off-grid electrification utilising renewable energy sources, such as solar home systems (SHS). It also provided output-based aid subsidies to lower the cost of SHS for consumers who cannot afford to pay for the service.
Since 2012, the second phase of the Rural Electrification and Renewable Energy Development Project has helped over 5.4 million people in remote rural areas get electricity access through solar home systems. They would otherwise rely on kerosene lamps. The project also supported solar mini-grids, solar irrigation pumps, improved cookstoves and biogas digesters, providing clean energy solutions to 1.9 million people. Sixty-one non-government organisations are installing clean energy products in rural households through micro-credit schemes. The original RERED II Project was financed with a $155 million credit from the International Development Association in September 2012. Additional $78.4 million and $55 million financings were approved in 2014 and 2018 respectively.
The Infrastructure Development Company Limited is the key implementing agency of this project. It facilitated coordination between the World Bank and development partners, effectively channelling multiple finance streams through its renewable energy programs under the project. The World Bank mobilised financing from other partners, including $30 million from Global Partnership on Output Based Aid, $7 million from United States Agency for International Development, $10 million from Bangladesh Climate Change Resilience Fund, and $20 million from Green Climate Fund.
The progress of the project from 2012 to 2020 is shown below:
7.3 Million
Remote rural residents gained access to clean, renewable energy.
Over 60%
Beneficiaries were women
12% Increase
Of Bangladesh's Electricity Access
26 Solar Mini-grids
Provided power to over 8,000 shops, businesses and homes.
1,130 Solar Irrigation Pumps
Assisted 35,000 farmers.
1.8 Million Improved Cookstoves
Sold nationwide
The project has supported the government’s goal of achieving universal electricity access and 100% improved cookstove coverage by 2030 under the National Action Plan for Clean Cooking.
The Bangladesh Rural Electrification Board (BREB) formed special teams for its village electricity committees to ensure uninterrupted power supply in rural areas during the coronavirus crisis in 2020. The teams were called ‘Durjoge Alor Guerrilla‘ (disaster light guerrilla). They included local residents. Their role was to make sure electricity supply continued in any crisis situation.
BDT 500
Security Money
Within 5-10 Minutes
Electricity Connection
BREB initiated the Alor Ferrywala programme to ensure electrification in the remote rural areas in 2019. The ultimate goal was to bring everyone in Bangladesh under electricity coverage before 2021. The programme provided connections by going door to door. It costed only BDT 550 for connection and as security money. The connection was provided only within 5-10 minutes. They have provided 2.1 million connections in this process. This is how the authorities could ensure 100% electrification within the stipulated time. This increase in power production added around BDT 46 million to BDT 107 million in the economy.
BREB has designed three phases to ensure electricity connection and services for around 0.25 million customers falling under its 1,059 off-grid villages. The first phase covered 646 villages, which are situated in less remote and inaccessible areas. Construction of 15 substations and 5,000km long electricity line and laying submarine cables in 35 river crossing areas were also completed in this phase.
The second phase of the programme covered 384 villages located in extremely remote and inaccessible areas. Three substations and a 4,000 km power distribution line were also constructed under this phase. During the third phase, solar home systems were installed in around 6,000 households in 29 remote and inaccessible villages.
The Way Forward
The government should upgrade the distribution system and increase manpower at the Rural Electrification Board (REB).
The Bangladesh Rural Electrification Board (BREB) should adopt decentralisation in its administration and monitoring. It can divide its operations into several zonal offices for efficient supervision. More allocation from the national budget is also necessary to implement the required system expansion for rural electricity. This allocation can create economic opportunities for rural people, promoting new small and medium enterprises.
The REB should explore ways to reduce construction and distribution costs for rural electrification. Rural electrification prices should be set at a realistic level. However, tariffs should also ensure the recovery of basic operational costs to make rural energy supply financially viable and sustainable.
Professional and dedicated leadership with committed officers is required at all stages of the REB to achieve its ultimate objectives.
As the Bangladeshi power grid becomes more intricate with rising imports and integration of variable renewable energy sources, its management and upgrades would be better handled by an entity entrusted to oversee the transmission network infrastructure. The Government of Bangladesh should separate the scheduling and load dispatch functions from the Power Grid Company of Bangladesh (PGCB) and assign them to a new independent system operator, which may also oversee the operation of the wholesale electricity market.
Renewable energy is crucial for Bangladesh’s energy security and low-carbon future. While the country has immense potential, the sector faces numerous challenges, including policy uncertainty, limited coordination between government agencies, lack of available land, lack of resource data, and lack of grid availability for power evacuation. The Government of Bangladesh’s energy agencies should implement the Scaling Up Renewable Energy Program (SREP) to help increase the share of renewable energy.
Cover Photo: A solar panel generates electricity for this home in Bangladesh. Thomas Trutschel/Photothek
About the Author
Umme Farzana Rupa, a former debater, currently excelling as a passionate student at Bangladesh University of Professionals. Engaging communicator and dedicated learner, she continues to thrive in academics, leaving her mark on campus with her inquisitive spirit and determination.