Electricity is playing a pivoting role in economic and social development and is therefore regarded as one of the key development tools compared to others. The quantity of per capita electricity consumption signifies the level of development of a country. In Bangladesh, access to electricity is one of the lowest in the world, with only about 35% of the population having access. The same is true for per capita generation capacity, which is only 155 kWh. For the past 55 years, the Government has been managing the power sector through the Power Division. Presently, BPDB, REB, DESA, DESCO, and PGCB are operating in the power sector. Although this sector has handled a huge amount of financial resources, it has failed to install significant generation facilities and transmission lines from its own resources. Most investments in this sector have been made through Government funding and donor support. However, in recent years, a substantial amount of private investment has entered the power generation sub-sector with the introduction of Independent Power Producers (IPPs). To achieve the targeted GDP growth by 2007, there is significant investment potential in the generation, transmission, and distribution of electricity in Bangladesh.

The shortage of power supply and frequent voltage fluctuations have become major obstacles to development activities. According to some estimates, the resulting loss in output is as high as one percent of GDP. The availability of reliable electricity is one of the key prerequisites for attracting both domestic and foreign investment in the manufacturing and service sectors. It also has a significant influence on social and human development. Since power development is highly capital-intensive, it requires substantial financial resources for project implementation. It is not possible for the Government alone to provide the enormous amount of funding required to achieve these objectives. Therefore, private sector participation and enhanced support from development partners are essential in the foreseeable future. Fortunately, Bangladesh's natural gas and coal resources, among the cleanest and most efficient fuels for power generation, provide a unique opportunity to help mitigate the country's power crisis.