Capacity is no longer the main constraint
Over the past two decades, Bangladesh has expanded its generation capacity substantially through public power plants and independent power producers selling to the Bangladesh Power Development Board. The challenge facing the sector today is less about building capacity and more about running it efficiently: securing gas, coal, liquid fuel and imported LNG at a sustainable cost, and keeping payments flowing through a value chain in which the state is the main buyer.
For leaders of energy businesses, the outlook therefore rests on factors largely outside their control, including fuel availability, tariff policy and public finances. Strategy discussions increasingly focus on resilience and on how long a business can operate comfortably when those factors move against it.
Liquidity and currency exposure
Many generation and fuel supply businesses carry significant receivables from state-owned counterparties alongside foreign currency obligations to lenders, equipment suppliers and fuel vendors. Treasury teams need dependable cash flow forecasts, clear ageing of receivables and a realistic view of when foreign exchange will be available for payments abroad.
These conditions also raise accounting judgements on expected credit losses, impairment, going concern and the disclosure of foreign exchange risk. Our Financial Statement Audits address these areas with management and audit committees early in the cycle, so that difficult conclusions are not left until the reporting deadline.
Renewables and the next wave of investment
Government policy supports a larger role for renewable generation, and the Sustainable and Renewable Energy Development Authority promotes solar, energy efficiency and related programmes. Utility-scale and rooftop solar, captive generation for industry and efficiency projects are attracting both local groups and foreign investors.
Each of these brings questions on land, grid connection, offtake terms, tariff structure and financing. Investors and lenders expect credible project economics before committing capital, and our Corporate Finance team supports feasibility work, financial modelling, valuation and debt raising for energy projects.
Priorities for boards
We see three priorities recurring in board discussions across the sector: protecting liquidity through disciplined working capital and treasury management, strengthening the evidence behind key accounting judgements, and assessing new investments in renewables and efficiency against realistic assumptions.
A fourth is preparing for contracts that are approaching the end of their original term. Older plants face decisions on extension, renegotiation or retirement, each with consequences for asset lives, impairment and staffing that should be modelled well in advance.
Tax structure matters throughout. Our Corporate Tax Services help sponsors understand exemption conditions and the treatment of cross-border payments under the Income Tax Act 2023, so that project returns are not eroded by avoidable tax costs.
Related RRH services: Financial Statement Audits, Corporate Finance and Corporate Tax Services.