What a New IEEFA Report on Failed Asian LNG Plants Means for Bangladesh's Power Subsidy Bill

A new report from the Institute for Energy Economics and Financial Analysis has a blunt message for Bangladesh and three of its regional peers, the LNG fired power plants they bet on five years ago have mostly failed to deliver, and the ones that did get built are now locking in subsidy costs that will be painful for years to come. For Bangladesh, which has leaned on imported liquefied natural gas to plug its energy gap since 2021, the findings help explain why electricity subsidies keep climbing even as the government keeps paying for more gas.

• Bangladesh currently pays more than Tk60 in subsidy for every cubic metre of gas when imported LNG costs $20 per unit, known as MMBtu.
• Asian spot LNG prices hit $27.50 per MMBtu in September 2026, nearly three times pre conflict levels, pushing the real subsidy cost even higher than that baseline.
• Across Bangladesh, the Philippines, Vietnam and Thailand, IEEFA found $67.8 billion worth of LNG power plants and import terminals cancelled or stalled since 2021, about 4.5 times the value of what was actually completed.
• Only 11 percent of the power capacity and 15 percent of the import terminal capacity that was proposed in the region five years ago has actually come online.

What the report looked at

IEEFA's study, titled "LNG-to-Power in Emerging Asia: A Five-Year Review of Project Outcomes" and released on November 5, tracked 92 proposed LNG fired power projects worth a combined $109.2 billion and 44 planned LNG import terminals worth $21 billion across the four countries since 2021. Of that pipeline, 49 power plants and 22 regasification terminals, together worth $67.8 billion, were either cancelled outright or made no meaningful progress toward completion. The plants that did get built took more than seven years on average to reach commercial operation, nearly double developers' original estimate of three to four years.

Where Bangladesh fits in

Bangladesh has commissioned three LNG fired power plants since 2021, a smaller slice of the regional pipeline than Vietnam or the Philippines, but one that illustrates the same underlying problem. Despite the spending committed to LNG import infrastructure, the country still experiences gas shortages because supply has proven unreliable, exactly the mismatch between investment and delivery that the report documents across the region.

Shafiqul Alam, IEEFA's lead energy analyst for Bangladesh, says the pattern should push policymakers toward alternatives rather than doubling down on LNG. His recommendation centres on three areas, developing Bangladesh's own domestic gas reserves, tightening energy efficiency so less fuel is needed in the first place, and expanding renewable capacity to reduce reliance on an imported fuel whose price Bangladesh cannot control.

The subsidy math behind rising power costs

The chart above shows the scale of the mismatch across the region, roughly $130 billion in LNG power and terminal projects were proposed, but only about $15 billion worth were actually completed, while nearly $68 billion sat cancelled or stalled. That gap matters because every delay and cost overrun on the projects that do get finished tends to show up later as a higher price tag on the electricity they eventually produce. Christopher Doleman, the report's co author and an IEEFA Asia LNG and gas specialist, estimates that currency depreciation, longer wait times for gas turbines and higher capital costs could push the lifetime cost of electricity from LNG fired plants up by as much as 130 percent compared with assumptions made in 2021.

Sam Reynolds, IEEFA's Asia LNG and gas research lead, frames the underlying shift simply, changes in fuel, equipment and currency markets have intensified execution risk for every LNG to power project still in the pipeline across emerging Asia, Bangladesh included.

Why the price spike makes it worse

Bangladesh's subsidy bill was already strained before this year's price swings. Asian spot LNG reached $27.50 per MMBtu in September, close to triple pre conflict levels, and heavy duty gas turbine delivery times have stretched to six years or more, meaning any new plant ordered today will not help relieve supply pressure for the better part of a decade. Each of those delays adds carrying costs that eventually land in either consumer tariffs or the government's subsidy budget.

The domestic gas alternative is already showing up

Alam's call to develop domestic gas reserves is not purely theoretical. State explorer Bapex announced earlier this month that it had struck gas again in Noakhali, a find estimated at Tk5,809 crore that officials say could ease some of the pressure on the energy import bill. One discovery will not replace LNG imports outright, Bangladesh's domestic gas fields have been in decline for years, which is precisely why the country turned to LNG in the first place, but it illustrates the kind of investment IEEFA argues deserves more attention relative to further LNG infrastructure that, on the report's own numbers, has a roughly even chance of being cancelled before it ever produces a unit of power.

What it means for you

For households and businesses, a widening gap between what imported gas costs and what the government can afford to subsidise tends to show up as periodic tariff adjustments, the kind Bangladesh has seen repeatedly over the past few years whenever global gas prices move. For a business weighing whether to invest in backup power or efficiency upgrades now rather than wait, the report's finding that LNG costs could rise 130 percent over the plant's lifetime is a strong argument for reducing exposure to grid price swings wherever possible. It is also a reminder that electricity subsidies, like fuel subsidies, are paid for eventually, either through taxes, through government borrowing, or through the tariff itself.