Bangladesh to seek coal import, investment in solar plants from Indonesia
Indonesia deemed to be alternative fuel source amid volatile political situation in Middle East
DHAKA, Bangladesh (MNTV) – Bangladesh is gearing up its efforts to foster closer economic ties with Indonesia, with plans to import coal from Indonesia and facilitate the entry of the Southeast Asian country’s state-owned oil giant, Pertamina, into the country’s energy market, reports The Business Standard.
According to documents obtained by TBS, these key issues will feature prominently during Chief Adviser Professor Muhammad Yunus’s visit to Jakarta in mid-August.
The visit is seen to be a crucial step in Bangladesh’s evolving energy diplomacy as it looks to secure stable fuel sources while rebalancing a heavily skewed bilateral trade equation.
The Ministry of Foreign Affairs has already begun laying the groundwork for the visit, having convened an inter-ministerial meeting on 7 July to coordinate agendas across energy, trade and investment portfolios.
According to meeting discussions, the Bangladesh side will explore the opportunity of coal import directly from Indonesia under the agreement.
Bangladesh will also look for Indonesian investment in solar power plants and in Floating Storage and Regasification Unit (FSRU), mooring infrastructure and gas pipelines projects with the estimated cost of $2billion.
Speaking to TBS, Energy Adviser Muhammad Fouzul Kabir Khan said Bangladesh is interested in direct government-to-government (G2G) coal imports and investing in Indonesian coal mines.
“We have long been facing complications with tenders – allegations of manipulation, inflated prices, and substandard coal quality. A G2G arrangement could bypass these inefficiencies,” said the adviser, underlining the need for more predictable and transparent procurement.
Indonesian oil giant keen on fuel supply
As part of its push into the Bangladeshi energy market, Pertamina officials held discussions with Bangladesh’s energy secretary, expressing their keenness to supply fuel to Bangladesh, a market currently dominated by Middle Eastern countries such as Saudi Arabia, Qatar, and Abu Dhabi, according to Energy Division sources.
According to BPC data, in the 2023-24 fiscal year, Bangladesh imported 6.7 million tonnes of fuel, including 1.5 million tonnes of crude oil from Middle East countries alone.
In light of geopolitical volatility in the Middle East, Bangladesh is actively seeking alternative suppliers from Southeast Asia, with Indonesia being considered a viable option given its proximity and geopolitical stability.
Bangladesh is also considering Pertamina as a potential supplier of gasoline, marine fuel, and lubricants. “Our oil imports are overly dependent on the Middle East, which remains geopolitically volatile,” said Fouzul. “We are exploring a new window of supply from Southeast Asia as a hedge against possible disruptions.”
Policymakers suggest that Pertamina’s interest could herald a new era of bilateral energy cooperation, transforming it from mere trade into a strategic partnership. However, observers caution that without a parallel drive to boost Bangladesh’s exports to Indonesia, the widening trade imbalance could become a politically sensitive issue.
Power Division officials say the government will encourage the private sector to invest in coal mines, following a proposal already submitted by the Indonesian government. “We are also seeking Indonesian investment in FSRU. Indonesia proposed a joint investment in a coal mine, and we are now exploring that avenue. We are also thinking about the investors –government or private firms,” said Fouzul.
Investment in solar plants
According to meeting minutes, Bangladesh aims to make headway in implementing an earlier memorandum of understanding (MoU) for a proposed 500MW solar power plant in Maheshkhali’s Matarbari. An MoU between Bangladesh Coal Power Generation Company Limited and PT Power, signed on 15 July, outlines financing of approximately $500 million for this project, with Bangladesh providing the land for the joint venture.
The energy adviser said, “Bangladesh is also reviewing the proposal of an Indonesian company to supply oil and interest in the operation of the Single Point Mooring terminal.”
Pertamina has already submitted a bid for the Operation and Maintenance (O&M) of the Single Point Mooring, which is currently being evaluated by the tender authority, BPC.
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