Electric power is generated by a hydroelectric complex in the Chittagong Hills and thermal plants in Chittagong and several locations in central and western Bangladesh. In 1987 the government announced its intention to proceed with construction of its first nuclear power facility, having concluded that the country's long-term needs could not be met by continued reliance on natural gas reserves. They did not announce how the project would be financed, but West Germany was considered the most likely source. The country's total generating capacity was 1,141 megawatts as of 1986, and the proposed nuclear plant would add between 300 and 400 megawatts.

Electric power outages and restrictions on peak-period consumption were a serious problem in the mid-1980s, resulting in substantial productivity losses for jute, textile, and other industrial concerns. Government and power board authorities worked out a strategy of planned brownouts and shutdowns, which were distributed geographically as equitably as possible to minimize economic disruption. Some industrial concerns adopted off-peak work schedules, operating their factories in the middle of the night instead of in the daytime.

There were also substantial losses in the transmission and distribution of electric power, including many unauthorized hookups to the system. The urban distribution system found it difficult to persuade subscribers, including state-owned industries, to pay their bills. In contrast, the system of rural electrification cooperatives, established in the late-1970s with assistance from the United States and other donors, and gradually expanding since then, has demonstrated that it is possible to deliver electric power effectively to nonurban consumers. Rural electrification immediately transforms economic life: within weeks a profusion of consumer goods appears, night markets open (complete with tiny cinemas for audiences of fifteen or twenty people), and demand for electric irrigation pumps soars.

Data as of September 1988