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Bangladesh Power Key View


Fitch Solutions Sector Intelligence  

 

    THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS COUNTRY RISK & INDUSTRY RESEARCH and is NOT a comment on Fitch Ratings' Credit Ratings. Any comments or data are solely derived from Fitch Solutions Country Risk & Industry Research and independent sources. Fitch Ratings analysts do not share data or information with Fitch Solutions Country Risk & Industry Research.

    Bangladesh Power Key View

    • 06 May 2022
    • Bangladesh
    • Power

    Key View: Bangladesh's power market remains dominated by the conventional thermal power sector, and this will continue over our forecast period. We highlight that gas power generation's share of the market's generation mix will decrease with the emergence of nuclear power and growth in the coal and solar power sectors. Nonetheless, gas power generation will still hold more than 75% of the market's generation mix in 2031. Transmission and distribution losses in the national grid remain high at 12%, reflecting inefficiencies and upgrading works required.

    Headline Power Forecasts (Bangladesh 2021-2026)
    Indicator 2021e 2022f 2023f 2024f 2025f 2026f
    Generation, Total, TWh 86.3 98.0 106.3 118.7 128.1 134.8
    Consumption, Net Consumption, TWh 80.4 89.7 96.3 107.6 116.6 121.9
    Capacity, Net, MW 21,781.7 25,343.9 28,196.2 31,548.7 34,585.0 35,726.7
    e/f = Fitch Solutions estimate/forecast. Source: EIA, UN, Fitch Solutions

    Latest Updates And Structural Trends

    • Thermal power generation remains the dominant power type in Bangladesh, supported by the gas power sub-sector. Bangladesh remains one of the few markets in the region to still have a substantial share of its generation mix coming from oil, at 15% by end-2021. As a result of the cancellation of 10 coal plants in 2021, we expect the coal power sub-sector to experience limited expansion as well.
    • Developments in Bangladesh’s nuclear power sector remain limited to only the 2.4GW Rooppur Nuclear Power Plant. We expect the plant to face some delays and have factored it to come online between 2024 and 2025, a year more than what the government aims for. Downside risks to the completion of this project come in the form of elevated costs, the technical complexity of the project and disrupted Russian involvement, which has been crucial in the plant’s development.
    • Bangladesh’s non-hydropower renewables sector remains fairly small when compared to sub-sectors in the conventional thermal sector. With new capacity additions to come online over the coming years, we will see the sector more than double in capacity. Though this bodes well for renewables in Bangladesh, the sector’s growth still pales in comparison to the coal and gas sub-sectors.
    • Bangladesh’s transmission and distribution network remains fairly poor performing, at an average of 12% output losses from 2022 to 2031. Developments to upgrade the grid have been slow, in spite of international aid. The market is also looking to ramp up electricity imports from Nepal and India as its power consumption increases. Cross-border grid integration has been progressing as well, facilitating power trade in South Asia.
    • Bangladesh is ranked 15th regionally and 38th globally in our Power Risk/Reward Index. The market has a mixed performance, performing well above the global and regional averages for its Rewards profile, but significantly lower for its Risks profile. Its Rewards profile is supported by an expanding power market, alongside a growing real GDP and population. Weighing down on its Risks profile is its risky political situation and operating environment, which is prone to supply disruptions.
    This report from Fitch Solutions Country Risk & Industry Research is a product of Fitch Solutions Group Ltd, UK Company registration number 08789939 ('FSG'). FSG is an affiliate of Fitch Ratings Inc. ('Fitch Ratings'). FSG is solely responsible for the content of this report, without any input from Fitch Ratings.

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