Bangladesh's plans to expand use of liquefied natural gas could tie it to a more expensive source of fuel that will increase its need for international loans, while missing opportunities in hydropower, solar and domestic gas, the Institute for Energy Economics and Financial Analysis said on Friday.
The government has announced plans to build two floating storage & regasification units and an on-land LNG terminal to meet growing demand that could take the LNG component of national gas needs to 60% after 2030, up from 33% last year.
But that will likely deepen the country's reliance on payment guarantees and loans from international agencies for its imports, raising affordability questions, IEEFA said.
It argued that alternatives should be considered, such as combining domestic gas and cross-border hydropower imports that would "drastically reduce" Bangladesh's LNG demand.
Savings could be made by embracing renewables and battery storage and reducing gas and power transmission losses and implementing demand-side management measures, it said.
Natural gas provides about 40% of the country's power but recent technical failures with LNG infrastructure prompted load shedding above 3 gigawatts from July 26 to Aug. 15, IEEFA said.
About 62.5% of national energy needs were met via imports in 2025, it said.
The country has plans to add 10.45 GW of renewables to the grid by 2030, add nuclear power plants and slightly increase liquefied petroleum gas and coal imports. Even under that scenario, IEEFA estimates that reliance on imported fossil fuels could rise to a total of 74%, up from about 60%.
IEEFA said it disagreed with private power producers that higher costs could be covered by household tariff increases, arguing that Bangladeshi power is more expensive than in some other Asian countries. It also noted that higher power prices were also a threat to the country's industrial competitiveness.