Providing Sustainable Electricity for Bangladesh

The Obstacle

In recent years, Bangladesh has made significant progress in expanding access to electricity, but it continues to face challenges related to reliability, resilience, and power quality. The country’s Ministry of Power, Energy, and Mineral Resources (MPEMR) views smart-grid technologies as crucial to boosting capacity and meeting climate goals as well as to future development. Despite a commitment to reduce carbon emissions by 21.8% by 2030, the necessary infrastructure was not in place to meet this goal.

Bangladesh was one of the fastest-growing regional economies at the time it made this commitment; even so, it had limited grid resilience in the face of worsening climate conditions and the reliability of its existing infrastructure posed significant challenges. Related issues included:

• Limited capabilities to integrate renewable energy into the grid 
• Limited automation of the grid (with huge value-unlock potential) 
• A need for significant improvements in customer service 
• A lack of technological know-how to fully establish a smart-grid system 
• A lack of coordination among different stakeholders and no unified roadmap to guide smart-grid activities 

Against this backdrop, BCG partnered with the US Trade and Development Agency (USTDA) to showcase Bangladesh’s potential needs to US technology suppliers while enabling the necessary collaboration for work on the grid to proceed. The idea was to create a mutually beneficial relationship, offering US suppliers access to a new market while equipping Bangladesh with the advanced technologies required for sustainable solutions—with the ultimate goal of driving progress towards a more reliable, efficient, green, and affordable power system.

Our Approach

To bring the relevant stakeholders together, BCG adopted a collaborative approach, suggesting technologies and solutions that were contextualized to Bangladesh’s emerging markets. BCG also created a strong business case based on extensive discussions and market-engagement activities with the stakeholders and facilitated strong collaboration across government agencies, potential funders, power utilities, and US technology suppliers.

The project was split into two phases. In phase one, we developed a smart-grid roadmap, conducting a thorough assessment of Bangladesh’s power sector and assessing the readiness of power utilities to accommodate smart-grid technology. This analysis included:

• Operational challenges 
• Technology gaps 
• Potential environmental impacts 
• An understanding of the regulatory and procurement environment 
• Funding options 

The roadmap contained almost 30 initiatives aimed at modernizing the grid through 2030 and was presented to senior-level stakeholders, including government ministers, leaders of Bangladesh’s power boards, and the managing directors and CEOs of power utilities. BCG developed tailored strategies for each utility and initiative, ensuring that the most impactful strategies were prioritized for maximum environmental, social, and developmental benefits while aligning with the country’s unique needs and challenges, which include extreme and worsening weather conditions.

In phase two, we assisted two utilities in developing smart-grid pilot programs. BCG prioritized and designed 10 pilot initiatives across distribution, transmission, and sector-wide projects. For these initiatives, BCG conducted and/or set up:

• A context and value analysis 
• A review of the technical details 
• An enablement approach 
• An implementation risk-mitigation strategy 
• Capacity-building sessions 
• Involvement of stakeholders at all levels, from the MPEMR to the management and staff of the engaged utilities 

In partnership with USTDA, BCG facilitated a “Smart Grid Experience Day” that brought together eight OEMs and technology partners from the US, enabling them to showcase their latest smart-grid solutions to a range of Bangladeshi officials. In addition, participants from four international finance and development-finance institutions were introduced to explore funding opportunities. More than 80 officials from 14 power utilities and authorities also participated. This led to four US technology companies signing memorandums of interest to set up innovation demo labs under a newly inaugurated Smart Grid Innovation Hub.

Through this work, and in partnership with USTDA, BCG played a crucial role in fostering collaboration among various stakeholders, ensuring that Bangladesh’s smart-grid initiatives across the program were tailored to address the specific challenges and requirements of the country’s power sector and workforce.

The smart-grid roadmap and pilot execution plan created by BCG served as a guiding framework for the government, facilitating ongoing capacity-building efforts and advancing Bangladesh's objectives for a sustainable and equitable power future.

For Bangladesh’s power utilities, the project has meant improved operational efficiency and reliability via the adoption of smart-grid technologies, which will reduce transmission and distribution losses and enhance system resilience. By modernizing infrastructure and building technical capacity as well as human capability, utilities will be better equipped to meet growing energy demands while supporting Bangladesh’s energy goals by lowering environmental impact and providing consistent, accessible, and affordable electricity.

The project has enormous implications for the resilience of the power grid in a country that frequently faces extreme weather events due to climate change. By ensuring reliable power and bolstering resilience, both the power sector and the wider economy will benefit significantly, leading to the creation of more jobs and new economic opportunities. A significantly improved power infrastructure will also enhance the country’s overall global competitiveness, ultimately benefiting the population as a whole.