Bangladesh is facing severe power crisis all over the country. This acute electricity crisis along with the conventional fuel crisis is affecting every sector of the country and economy is being crippled. Bagasse gasification in the sugar industries in Bangladesh could be an alternative option for electricity generation. Bagasse is the fiber left over after the juice has been squeezed out of sugarcane stalks and accounts 25% of sugar cane production. Bagasse, being a by-product of sugar production as well as of biomass origin seems to be a suitable candidate for sustainable energy production. There are 15 sugar mills in Bangladesh and sugar cane production in the fiscal year 2010-2011 was about 4.67 million tonnes and bagasse production was around 1.167 million tonnes. The potential of power generation from bagasse by gasification is around 100MWe in Bangladesh over the year. In this regards, in sugar industries, bagasse gasification for power generation for its own consumption could be an alternative option in Bangladesh and the surplus could be exported to the national grid. In this paper the prospects of bagasse gasification for power generation and the technological aspects of the gasification process as well as environmental effects have been studied