PRESS
RELEASE

The fourth episode of the State of the Investment Climate – Bangladesh webinar series, featuring Hon’ble Adviser Muhammad Fouzul Kabir Khan—who leads the ministries of Power, Energy & Mineral Resources, Road Transport & Bridges, and Railways—was held on 27 August 2025. The session was hosted by BIDA Executive Chairman Ashik Chowdhury, and featured key updates on policies and initiatives shaping Bangladesh’s investment climate.

Introduction

BIDA EC: Ladies and gentlemen, good afternoon. Welcome to the 4^th State of Investment Climate Seminar, Bangladesh.

We have amongst us a very special guest today, so let me first introduce him. He is of course, my mentor and generally, when I speak to him, I am quite scared of him. Our Honorable Adviser for Ministry of Power, Energy, and Mineral Resources Muhammad Fouzul Kabir Khan. He’s also the head for the Ministry of Road Transport, Bridges, and the Ministry of Railways.

A bit of background on our honorable guest. He’s a renowned economist and author. One of the books, well-read across all universities, is called Win, and it was recently translated into Chinese. He was Secretary of the Power Division from 2007 to 2009, and he has been consultant for various organizations including the World Bank, ADB, JICA and others.

So, let’s start our session straight away. We will move to our slides.

Presentation

We will talk about the economic update, followed by the progress reports, and then finally, we will speak to our honorable guest. We’ll ask him questions, some of the questions that you’ve already sent to me, and we will obviously allow you to ask questions on the dashboard. Please feel free to throw in questions for him. We will try to make sure that we get through as many as we can within the stipulated time frame.

So, let’s straight jump into the economic update.

First up is an interesting observation from a recent op-ed by the Finance Advisor and his Special Assistant. It clearly says that most countries that experienced a revolution of the kind we experienced last year suffered immediate and severe economic fallouts. For example, Indonesia in 1998—poverty doubled in a year. In Sri Lanka, in 2022–23, 26% of the population fell into poverty straight away. And in Russia, in 1991–1993, inflation exceeded 800% and life expectancy dropped by six years.

In contrast, if you look at what has happened in Bangladesh in recent times, we’ve been able to maintain a positive GDP growth. We saw a decline in inflation instead of a rise. We’ve stabilized the currency under a market-based regime. We have actually let the currency go, but it still looks pretty solid. We’ve achieved a stock market rally in recent times.

I do admit a lot of work still needs to be done, but it’s showing good signs. And we’ve received record remittances, boosting foreign reserves.

Inflation

As I said already, inflation is easing. Let’s look at the inflation trend we’ve seen in recent months. When the central bank governor spoke to us on the second episode of this webinar, if you recall, he talked about the arsenal of initiatives to stabilize the economy, and it’s showing results.

It was a tightening of monetary and fiscal policy, and a 10% policy rate cut that was really trying to drive inflation down. Structural reforms in the financial sector, asset recovery initiatives, and all of those were supported by some of those revenue-enhancing long-term changes we have seen in NBR, which we hope in the long run will give us a much better outlook as a country.

Purchasing Manager Index (PMI)

The next indicator, which is a very interesting one, is the Purchasing Manager Index (PMI). It is an internationally recognized benchmark and a monthly survey of over 500 private sector enterprises. A PMI of about 50 means you are okay, slowly expanding, no major change, maintaining the status quo. Below 50 means you’re shrinking. But if PMI is above 60, it shows there is confidence and belief that the market is ripe for growth, and therefore investors are looking for opportunities to invest.

Forex Reserve and the FX rate

Now, that’s sort of easing and stabilizing. That brings us to a third point, which is the Forex Reserve and the FX rate. The reserves we’ve seen are continuously going up with the support of IMF and the ever-increasing surge in support from the diaspora across the world. It’s the highest since August 2023, despite, as we always say, carrying around $3 billion of arrears, much of which is actually to the credit of our guest in the Energy Ministry. But higher inflows from remittances and our exports showing great results have definitely helped the cause.

I acknowledge all of these with the FDI number, which is coming in a bit, but let’s quickly jump into a very talked-about topic in between—the US trade negotiations.

US tariff negotiations

A lot has been talked about it: positive speculation, negative worries about how Bangladesh is going to fare. But now that we have landed somewhere in the form of a framework, there’s certainly more confidence in the export sector, especially after the last roundof negotiations. As a result, we are clearly seeing orders flooding in from US retailers, and some of them are obviously looking at other markets but now they should be looking at Bangladesh for the future. We’re expecting a similar trend from not only the US but also many other countries, given our factors of production advantage.

The tariffs apply only to the non-American portion of product value in our new favor, and to counter that, we’ve boosted our US cotton imports, and our apparel manufacturers are innovating, as usual, the ones I’ve spoken. I am are really excited to see the story of “Made with US Cotton” take shape.  So, retail business in the US market, we're also expecting that overall to regenerate or come back with the belief that Bangladesh is definitely there for the long run.

Foreign Direct Investment

Here’s one I’m really proud of. FDI has risen quite significantly in the last couple of months, and looking back at the last quarter, we see a 76% rise. A lot of it is happening in the China corridor and the South Korean corridor. Some of the great names you see on the right-hand side are not only new investments, but they also bring genuine technology transfers and skill development for our country, which we’re really excited about.

So, the momentum is building, and now let’s talk about what we are actually doing behind the scenes to build this momentum.

Reform Progress Report

At the very beginning of this year, we laid out about 30-plus reform initiatives to improve the investment climate. The number has now gone up to 32—we added one or two more while speaking to stakeholders. Here’s a snapshot: we’ve completed roughly 18, six are in progress, we are behind schedule for seven, and one of them we have now pushed out to 2026, thinking the time has really passed for us to make enough dent in that initiative.

This is a slide you’ve seen in every State of Investment Climate—we’ve come back with traffic lights on each of these initiatives. On the green side, we’ve rolled out and fully revamped the BIDA website, bringing it up to global standards, and we’ve also brought key agencies like NBR and Bangladesh Bank under the same group. So now, if an investor walks into the BIDA office, they can actually consult some of these key government ministry or agency partners sitting in the same office.

We’ve added two new reforms: one is setting up specialized zones—whether it’s a food trade zone or a military industry zone—and at the same time, a representative office, the first of its kind outside Bangladesh. The first one we’re looking at is in China.

One initiative has been dropped due to the upcoming elections, because we don’t think there’s enough time for the Advisory Council to take full momentum. It’s better if we pass it on to the political government to set it up.

BIDA’s new Investor Relationship Management team

I do want to put some spotlight on one or two initiatives. One we’ve been trying for a long time to get to, and we’ve finally managed it—we’ve actually been able to set up the first-ever investor relationship management team in BIDA, the first of its kind in a government agency in Bangladesh. The idea is to have a single point of contact for our investors, taking the best practices from banks, and really hand-holding the investor inside the government machinery.

I hope it shows benefit, not only from a service point of view but also from a cross-sectional learning point of view. The private sector will learn about the government, and the government will also learn a lot more about the private sector. Hopefully, when these folks go back to the private sector after their stint, they will take a lot of energy and connection and network back to the private sector, and I genuinely look forward to the future government to use this as a blue print for the future data structure.

Work permit simplification

Here are a few more critical items that we've constantly heard from our investors. The first one is the work permit simplification issue. The Ministry of Home has been very closely working with us to remove some of the unpredictability in security clearance and the time it takes for our foreign professionals in Bangladesh.

This will go live in September, sowe're also working to build the capacity of our officials in the Home Ministry to be able to make this reform sustainable. We're trying to digitize the process as much as possible.

Integration of Investment Promotion Agencies

The investment management is coming under a single umbrella in Bangladesh, as you have probably heard about. We are trying to create a unified body inside government that will behave as one entity instead of being frictional against each other, and we are getting help from the best global consultants to get this integration done so that it's done properly and it is a permanent setup.

FDI Incentive Scheme

And then, most importantly on the FDI initiative, one new thing we have introduced, and we will hopefully roll it outin Q4, is the incentive scheme, where we will be offering incentives for any Bangladeshi, whether non-resident or resident, who's going to help us bring FDI into our country.

So, all these things we do expect to finish in the next few months. Our key priorities till the end of this year will continue to be to complete these 32 reform initiatives, and at the same time, convert the high-priority leads that we have generated in our recent visits.

We intend to talk to our diaspora inthe US on the sidelines of the UN General Assembly in September. In October, we will be in Turkey and South Korea. We're designing G2B and B2B engagements there. And then in November, we have our quarterly visit to China. I do believe that that's a visit we need to do a lot more. It's almost like a continent, so you have to spread your wings to go to secondary and tertiary cities to make sure that Bangladesh is well within their radar. And throughout this time, we will focus on capacity building for officials in BIDA, as I genuinely think a lot of times senior government officials are asked to now deal with investment management, investment facilitation issues, but through out their career, they've actually never interacted with investors on a day-to-day basis. And therefore, it's not their fault, but our fault that we haven't given them enough training and capacity-building tools for them to be able to perform the way we expect them to perform.

Now, that's all from me. I would like to stop here. We want to jump into the more exciting part of our session today. So, if I could welcome our Honorable Advisor, Fouzul Kabir Sir, welcome to our session.

Q&A

BIDA EC: So, we'll start with logistics. It is a very big topic that we constantly hear from investors, our business partners. What kind of structural reforms are planned to boost the transport efficiency and reduce logistical costs in Bangladesh?

Adviser: Okay, so we need to complement the excellent work done by BIDA by developing our infrastructure, both our infrastructure and transport infrastructure. So, this question relates to the transport infrastructure.

Earlier, what we had was a haphazard building of roads here, building of railway lines there. So, what we're doing now is to develop an integrated multimodal transport plan.

So, the way we are doing it is: you take the map of Bangladesh, and then you put in the existing road infrastructure. And then you put in the existing railway infrastructure, and then you juxtapose it with our riverine communication infrastructure. Then that gives you the hubs for transport and mobility. And then once we have identified that, then we put in the actual movement of transport and goods movement data into the network.

So then you have your hubs identified, both on the basis of whatever existing infrastructure is there, and also based on the movement of goods and people.

The next step is to link and find out why these journeys are originating. So we link the hubs to the spokes. The analogy is that of a cycle rickshaw: you have the hub in the middle, and then all these spokes that join it.

So then we also link the hub with the spokes—the places where the journeys originate.

The advantage of this is that we’ll be able to find the infrastructure gap. So we have to find out where the infrastructure gap is, and then we investin that area.

Then, coming to the infrastructure, then we are farther able to develop, using this analytical tool is -- which is the most efficient way to move people and goods. Is it the roads? Is it ther ailways? Or it is the inland water transportation system, or it is the airlines? So that's what we are going to do, is that we will find out where the transport gaps are. And then how to meet those gaps that will smooth the movement. And also, find out what is the most efficient in the sense of both costs and also time taken.

So, we'll find out whether the railways are more efficient, or the roads, or the inland water, or airways. So, and then based on that, we will invest in those infrastructure, where we get more efficiencies.

BIDA EC: Thank you, sir. So, how long is this exercise going to take, or is it already almost towards the end?

Adviser: Yes, sir, we are already, so I am expecting a first draft of it. You'll be invited. In August, we are going to get it, and then we will review it ourselves, and then after our review, in September and October, we'll present it to the wider audience, including the Chief Adviser.

BIDA EC: Right. And then finally, when it has come to its full form, will it be shared with the public, or the business community, or the investors?

Adviser: Yes, everyone. Actually, once we get the nod from the chief adviser, and then our cabinet colleagues, BIDA and others. So then obviously we'll finalize it, and then we'll share it with the business community, and then see where the bottlenecks are, and then how we are going to address the bottlenecks, and then how we are going to move goods and people in a much more efficient and less expensive way.

BIDA EC: Thank you, sir. So, if I move on to power, which is, which a lot of people are very interested in, one of the questions we have is, what are the new business opportunities created by the Renewable Energy Policy 2025?

And are there specific incentives or policy measures that you would like to, like the investors to know? And how do you see this policy affecting the investment journey and the development journey of the car industry?

Adviser: Okay, so we've already issued two policy documents. One is already approved by the Cabinet or our Advisory Council, which is the renewable energy policy. That has already been done.

In addition, we will be taking to the Cabinet, a next policy, which is called the Merchant Power Policy.

So, renewable energy policy is understood. But Merchant Power Policy means that you have a single buyer model for purchase of power produced by the private sector. A person can set up a power plant, renewables or whatever, and then we'll be able to sell it to a customer of his or her choice, at a price mutually agreed.

So, you generate electricity in a particular area, then how do you move it to the ultimate customer's destination. So, to address this issue, what we have ar ranged is that we'll open our transmission and distribution networks. So, even the private producer of electricity will be able to send, dispatch the electricity to the customer in a different location by using our transmission and distribution network, by paying what you call a wheeling charge. It is a charge that even our local power generation companies pay to the Bangladesh Power Development Company.

So, that's the other thing that we are opening up. And then, in the renewable energy policy, we have added a number of incentives. We have lowered the duties. For example, there would be income tax exemption for 15 years. First 10 years, 10%. No income tax, and then 50% after 10 years, and 30% reduction in tax for the remainder of the period.

We've also reduced the duty for solar panels, solar in water and the other things. So, we have on the one hand, we have this concession on taxes and we have concession on the tariff. We're also trying to create a demand. So, the cabinet has approved National Rooftop Solar Program.

So, under which to begin with, all government offices will have solar power generation units. We are trying to have one at BIDA as well. These will reduce the cost of generational electricity and in most cases, will not have any batteries. So, this will be connected to the grid, and then this grid will work as the battery of sorts.

So, when there is excess, a generation in the building or whatever, in the industrial units. So then, you know, they could send it to the grid. At night, when there'll be no generation, you'll be able to import from the grid.

And then we'll facilitate what is called the net metering system, where every 3 months you'd be billed based on how much electricity did you consume from the grid, and how much electricity did you send, or supply to the grid. We are planning to have this in all our school buildings, hospitals and college buildings.

While the government buildings would be financed through government budgetary allocation, the schools and hospitals and colleges, so those will be, implemented through the OPEC's model’s -- for example, where the investor will get in. The investor could be utility, a private solar power company or an NGO. So obviously, they'll enter into a contractual arrangement with the schools, or the hospital, or the college. And then they will share the benefits of generation.

Fortunately for us, solar electricity has now become competitive. We hope to get about, from these two initiatives, we hope to get about 3,000-megawatt peak of electricity -- some of it by December, and others will be February and onwards.

In addition, we also have floated tenders for, 50-odd solarplants. These are ground-based solar power plants. We have received bids for those, which we are evaluating.

We are also preparing our transmission grid for this solar. As you know with solar -- our most prospective source of renewable energy -- there'd be a question regarding stability of the grid? Because all of a sudden there will be a drop at dusk or sunset, solar generation will stop, so that would create a frequency problem. So, to address that issue, we are, introducing BES -- the battery, energy, storage system so that the frequency is well adjusted. So we are taking precaution so that this does not affect the performance of the transmission and distribution system.

BIDA EC: Great. Thank you, sir. That was power. So, if I switch to the energy side, which is a much-talked-about topic in our country, about energy security, the gas scarcity situation, the FSRU challenge, so if you would be able to give us a general view of what is your future outlook?

Adviser: Alright. You see, the energy situation in Bangladesh is like this. We have two types of energy: primary energy and secondary energy, because our energy basically means electricity. So, in terms of primary energy, we have natural gas. But that gas reserve is dwindling. And then our power plants and our industries are all heavily dependent on this.

To meet this situation, we have started onshore and offshore exploration of gas. We are proceeding with that. But as you know, these things take time. Tendering takes time, project implementation takes time—even if it’s awarded, it still takes time.

So, in the mean time, what we are doing is increasing imports of energy. For example, last year we imported 84 cargoes—meaning 84 shiploads—of LNG. This year, we have a plan to import 104 cargoes, so 20 additional ships, to make up the short age in domestic supply and also meet the increased demand for gas.

We have about a shortfall of around 1,000 MMCFD per day. We are addressing this in a number of ways.

First, as I said, we are importing 20 extra cargoes of LNG.

Second, there are a lot of unauthorized gas connections. According to estimates, this could be around 300 to 500 MMCFD. We are disconnecting those unauthorized connections so that the gas is added back into the supply.

Third, we are pushing forward with the solar program. This will help us in the following way: we have a lot of captive generation in our industries, and these are gas-fired. They are extremely inefficient because they use gas engines. But we have more efficient combined cycle plants, where both gas and steam are used.

So what we will do is stop supplying gas to these inefficient captive generators, and instead, supply them through the grid by generating electricity in the more efficient combined cycle plants.That way, gas will be released and made available either for more efficient electricity generation, or for industrial uses such as running boilers and soon.

But the fundamental problem with the power and energy sector of Bangladesh was the unprecedented corruption that took place. What we have done is dismantle the entire architecture of corruption. There was a law—the 2010 law—that allowed contracting of energy projects without open tendering. We have abandoned that law.

We have also carried out other reforms. Another problem was the huge unpaid bills in the energy sector. When this interim government took over, we had about $3.2 billion of unpaid bills. These unpaid bills created uncertainty of supply. Payments were delayed, and more importantly, suppliers were pricing this delay into the cost of gas, petroleum,and other energy products.

So, one of our strategies was to reduce the debt. We have made the energy sector completely free of over due payments. In the power sector, we still have some liabilities, but we have reduced it from $3.2 billion to around $600–700 million, and we are gradually bringing it down further.

Now, we have three models of doing business in Bangladesh. The first is open tender. This is the most predominant and preferred way, because it allows for price discovery—you find out the best price and get value for money.

The second is G2G, government-to-government agreements. But here also, we are taking a more rigorous approach, because in some cases, G2G prices were very high.

The third model is public-private partnerships, where a government utility gives concessions to a private party, either domestic or foreign.

Overall, as this government is a short-term government, we believe in continuity. Governments may change, but the energy and power sector must remain on a financially sustainable basis. We want to leave behind templates for competitive procurement, good G2G procurement, and solid public-private partnership documents.

BIDA EC: Thank you, sir. There’s across-cutting question I’ve picked up: What is the government’s current policy and future roadmap for EV charging infrastructure within petrol stations across Bangladesh? And does it align with the country’s energy transition and sustainability goals?

Adviser: This is a very good question. One of our strategies is to move from fossil fuel-based transportation to cleaner, electricity-based systems.

The government has signed an agreement with the World Bank for 450 electric buses. We are also working on electrictrains and so on.

As the number of electric vehicles increases, we will set up EV charging stations. We intend to open up our existing petrol and gas stations to also provide EV charging. We will provide them with the necessary electricity connection.

This is something we are very interested in, and we will fully support any investor who wants to invest in EV charging stations, import EVs, or run EVs on the roads.They will get all kinds of support from the government.

BIDA EC: Thank you. May be we’ll take one last question. What is your view on the different sources of energy as we try to draw our power generation roadmap in future—coal, gas, nuclear, solar, wind?

Adviser: Currently, we are working on an updated Integrated Power and Energy Sector Master Plan. The previous master plan did not foresee the looming shortage of gas, nor did it focus adequately on renewable energy. It did not consider the potential of renewable energy to save primary energy and meet electricity demand.

So, our strategy would be this:

For primary energy, we will continue exploration. We are conducting around 200 onshore gas explorations per year and issuing tenders for offshore exploration to augment domestic supply.

We are also increasing LNG imports. For that, we are moving ahead with tenders for another one or two FSRUs—one in Chittagong (where two already exist) and another in the south, in Payra. This will ensure that if we don’t get enough domestic gas, we can import more.

We also have coal reserves under ground. We are preparing a document that will allow the next government to proceed with coal extraction. There is debate over open-pit versus under ground mining, so we will leave that to the elected government.

We must diversify. We cannot put all our eggs in one basket. We will use gas, coal, solar, nuclear, and also improve logistics to bring down import costs.

We are still working on updating the integrated master plan, and it should be completed by December. Once it’s done, it will provide a roadmap for the power and energy sector.

BIDA EC: Thank you, sir. Hopefully that roadmap will be a Christmas gift for investors. We are way over time, so apologies to the audience whose questions we couldn’t take. We will send answers via email and also share today’s slides on LinkedIn for everyone to download. Thank you all again for joining. Thank you, sir, for your valuable time.

Adviser: To the investors—our Power and Energy Ministry and the Road Transport Ministry are open and forth coming, because we have no agenda of our own. The country’s agenda is our agenda, and we will be happy to help you in any way we can.

BIDA EC: Thank you, sir. There’s no better way to end this.

Adviser: Thank you.