I couldn’t be present from the beginning of the Bonik Barta-organised policy conclave. There was a slight delay due to official duties. But if I had been there from the beginning, I would have learned many things, and I have some regret about that. This event by Bonik Barta is meant to help us, and it benefits us as well. Based on various opinions, it becomes easier to determine our own course of action. So even though I couldn’t be present from the start, I’ve briefly learned about the remarks made at the event. It’s worth mentioning that a tyrannical governance structure for 17 years had broken down all kinds of management and institutions in the country. The judiciary isn’t strong, and there’s no proper enforcement of the law. The administrative structure has also completely collapsed.

In particular, the state of the ministry I’ve been entrusted with is even more fragile. I’ve been serving in this ministry for only six months. During these few days, it felt like work wasn’t done to advance the ministry’s operations through proper planning in the past. Power stations were built, and a power generation capacity of 28,000 megawatts was secured. But to ensure the full utilisation of this capacity, fuel is required. As part of ensuring fuel availability, exploration needs to be increased. But a major deficit of that was seen in the past. Over 17 years, no oil and gas exploration took place, and not even a single well could be drilled. The entire country is now dependent on imported fuel. Even with imports, proper management and storage planning were also necessary. If facilities and infrastructure had been built under an import policy, at least we wouldn’t have had to face such complexities.

LNG imports and offloading require Floating Storage and Regasification Units (FSRUs). Only two terminals are currently active in the country. Recently, a fire broke out at one of them. An LNG carrier fortunately moved away before berthing there; otherwise, a major disaster would have occurred. Due to this problem, we couldn’t supply LNG, creating pressure on gas. Gas isn’t available in many places, including Mymensingh. There’s suffering due to gas shortages in numerous locations. Long queues of CNG vehicles unable to get gas have been reported in the media, with some angry people even blocking roads. This has now become an everyday picture.

There are three gas-fired power plants in Khulna, all of which are currently inactive. There are reasons for them being inactive. A gas pipeline is planned for Bhola. If gas is supplied smoothly through that pipeline, these power plants can become active. We also have to think about the pipeline in Bhola — whether building this pipeline will be sustainable, how much investment is necessary, and what its capacity is. We have to carry out discussions every day about whether any returns will come after the pipeline is built and the gas eventually runs out. Due to these stagnations, the power plants have now become like museums. Coordinating coal-fired power plants with the mines would bring some relief. We currently receive only a small amount of coal because we don’t have open-pit coal mines. Without open-pit mines, extraction from underground mines can’t exceed a maximum of 10 to 15 percent; it simply can’t go higher. Right now, we have three power plants close to the coal mines, including a Chinese power plant. They’re utilised, but sometimes these plants also become inoperable. During those times, coal stock increases, but we can’t generate electricity.

The biggest problem is that the government has to bear a massive amount of capacity charges. Because sovereign guarantees were given, the government itself is bound to pay these charges. For those who have invested under capacity charges, the guarantee is the bank. Providing such guarantees legally obligates the state to make these payments, and no matter how much we try, this can’t be avoided. I’ve taken charge of the Ministry of Power, Energy and Mineral Resources amidst such a situation. I’m working on energy security. Prime Minister Tarique Rahman frequently holds meetings with us, and we’re relentlessly trying to explore alternatives on how to ensure security in this sector. The task is immensely difficult. Energy is a sector full of complexities, which have further intensified and prolonged due to the Middle East conflicts. We had long-term agreements regarding LNG imports with Qatar and Abu Dhabi. But due to the wartime situation, those agreements aren’t operational. So we must search for alternative markets. The reality is that bypassing the Strait of Hormuz to find alternative markets will significantly increase costs, which is why we had to buy LNG at exorbitant prices. This issue was also raised in the discussion. If fuel commodities continue to be purchased at such inflated prices, the subsidies allocated for this sector in the budget will also be exhausted, and we won’t be able to sustain this for long. It’s also crucial to consider the limitations of the finance ministry. The situation is such that we’re purchasing electricity at a high price and distributing it at a low price, which acts as a barrier in the management of the power ministry. Meanwhile, there are outstanding bills totalling BDT 670 billion, and even I don’t know how these will be settled.

To collect the outstanding bills of BDT 670 billion by adding them to current electricity bills, a committee has been formed in the finance ministry. This is a massive burden, but there’s nothing to be afraid of. We’re trying to handle the crisis with sincerity and honesty. I myself have come from a business background, so I have a good mental understanding of the sorrows and frustrations of businesspeople, and I can even comprehend the banking crisis. Based on the way we, as Bengalis, have done business and built the industrial sector, it can be said that no one is more courageous than us. Because industrial enterprises in the country must produce and return at least 30 percent to the bank, and then regularly meet other expenses as well. After all of this, making a profit is something only a Bengali can do; I don’t think anyone else can. Such a thing isn’t seen anywhere else in the world. We certainly possess that inner strength and courage.

To keep the wheels of the economy turning, investment must be attracted, and this matter is also in our plans and thoughts. Many participants in the conclave noted that the liquidity crisis in banks has taken a severe form. Loans aren’t available from banks, and money has run out. Due to the problems in banks, suffering has increased in the lives of many people. Many of my own relatives had saved some money in banks after retirement, especially in Islamic banks, through which they could think of a secure future. But due to a shortage of funds in the banks, they have nothing left, and a kind of uncertainty has been created. Now, assurances are being given to recover the plundered money, and that commitment is also reflected in our budget. We have to regularly import fuel oil and gas, and we must carry on our work amidst all these crises.

Prime Minister Tarique Rahman’s father, martyred President Ziaur Rahman, is the one who created entrepreneurs in the country; increasing entrepreneurship in Bangladesh began through him. Through a single directive, he arranged bank loans of BDT 200 billion for entrepreneurs, inspiring Bengalis to take up entrepreneurship. In this way, Bangladesh’s commercial world has progressed a long way, and the same holds true for the ready-made garment sector. The efforts that Ziaur Rahman made are being continued by his son through the same methods, working to make bank facilities even more accessible.

Let us come to solar energy. Solar power is currently one of the most important issues in Bangladesh. We recently announced a solar policy, and for the first time after the announcement of a solar policy, the CPD (Centre for Policy Dialogue) publicly praised it. Receiving praise from an institution like the CPD is no easy matter, yet they’ve evaluated our policy positively. The policy is completely investment-friendly, placing the highest importance on the protection of investors. Because I believe that if an investor doesn’t get a proper return on their investment, why would they invest? Pakistan’s example also came up here, where Pakistan imported a massive amount of solar equipment at once and made it accessible to the people. People installed solar systems themselves, leading to the proliferation of solar power there. But we’re not going down that model. We plan to provide fiscal support — meaning, encouraging investment through tax benefits. We’ve reduced various existing taxes in the solar sector, set minimum taxes in many cases, and decided to offer tax holidays. Tax holidays have always played a positive role in industrialisation in Bangladesh. Even during the Pakistan era, the industrial sector was encouraged through such policies. Drawing from that experience, we’re providing similar policy support in the solar sector. Now, solar electricity tariffs are coming down worldwide because there’s no fuel cost for solar energy; the main expenses lie in management, batteries and necessary infrastructure. I believe that if we can proceed with this model and our entrepreneurs step forward, this sector will expand rapidly. We intentionally don’t want to keep the entire matter in the government’s hands, because government projects frequently accumulate massive amounts of arrears. It should be operated under a private-to-private model. Whoever can provide the best service and competitive pricing in the market will do the work. As for the land issue, we’ve already taken necessary steps. Now, the main goal will be to create an investment-friendly environment and ensure the rapid expansion of rooftop solar.

We’re trying to create all possible facilities and opportunities for investors. The prime minister’s clear directive is that everything doesn’t need to be done with government funds; wherever possible, the private sector has been instructed to take charge. With everyone’s cooperation, by the end of my tenure, I want to take solar power generation to 10,000 megawatts. We’re moving forward with this target. I call upon businesspeople and entrepreneurs to take the facilities we’re offering, including tax holidays. We’ll also provide incentives to consumers who install solar systems in their homes, while those who show reluctance will have to pay higher taxes.

For 17 long years, there was a lack of effective planning in the country’s energy sector. During this time, despite giving importance to building power plants in the country, necessary initiatives weren’t taken for domestic gas exploration and production. A power generation capacity of 28,000 megawatts was created, but no effective initiative was taken to explore the gas required to generate electricity. Not a single gas well was drilled in 17 years, leaving the entire country heavily dependent on imported fuel. Moreover, the infrastructure required for import-dependent fuel is also inadequate; currently, there are only two FSRUs in the country. Since one of them has now met with an accident, pressure has been created on gas supply. As gas pressure drops, people in various areas, including Mymensingh, aren’t getting gas, and CNG stations aren’t receiving gas. In many places, people are blocking roads, which has almost become a regular occurrence. To ensure long-term energy security, there’s no alternative to increasing domestic gas exploration and production. LNG import infrastructure must also be further strengthened so that a problem in any single facility doesn’t create a major crisis in gas supply across the entire country.

I want efficient private companies to take over the responsibility of electricity distribution. In this regard, India is a major example for us. Private companies are successfully distributing electricity in Kolkata. Companies like Reliance in Mumbai and Adani in Delhi are carrying out this responsibility with efficiency. If India can do it, it’s not impossible for our entrepreneurs. The government’s primary responsibility should be to ensure electricity generation and wholesale supply. It’s not right for the government to run business at the wholesale level. The government can generate electricity and sell it at the wholesale level, while retail distribution should be left to the efficient private sector. This is my personal opinion. In the long run, I want to see the privatisation of the power distribution companies under my jurisdiction. Collecting electricity bills is a major challenge. In many cases, people don’t want to pay their bills on time. This is why I believe the private sector should be more involved in these areas, because accountability is higher in the private sector, and their efficiency in bill collection is also good. This reduces the government’s financial burden and makes the entire management more effective. The pressure on the government must be reduced.

Those who have family cards will receive one LPG cylinder every month at a concessional rate. That is, a farmer or beneficiary will buy a cylinder at market price using their family card, and then the difference in subsidy will automatically go into their account. We’re working on this model. This system is in place in India, and it’s been very successful in this regard.

I’m in charge of a ministry that is different from any other ministry. It’s not a ministry responsible for building infrastructure; rather, this ministry imports through spending money and then has to recover that money. So the work of this ministry is much more difficult. Once I was a businessman and a part-time politician; now I’m a full-time politician, not in business. So I call upon you to invest more in solar power. Through these investments, help develop the renewable energy sector.

Even currently, various reform initiatives are being taken to ease business and commerce. Efforts are underway to make banking facilities more accessible, simplify financing for entrepreneurs, and create an investment-friendly environment. We also want to build the country as a welfare state. With that goal in mind, initiatives have been taken to introduce family cards, farmer cards and health cards. Now we’re also thinking about introducing a special card for expatriate remittance-earning workers, so that they can easily receive various services and benefits upon returning to the country.

Iqbal Hassan Mahmood: Minister of the Ministry of Power, Energy and Mineral Resources.

(From his speech as the Chief Guest at the Policy Conclave titled “Energy Security & Transformation of Bangladesh,” organised by Bonik Barta)