Bangladesh's Renewable Energy Transition Stalls Despite Ambitious Targets
Bangladesh's renewable energy transition faces challenges despite ambitious targets. By 2023, only 3.6% of required funds had been received, with banks financing just Tk742 crore against an estimated Tk 20,500 crore. Meanwhile, 31 utility-scale projects were suspended due to bidding issues.
Bangladesh aims for 20% renewable energy in total electricity supply by 2030 and 30% by 2040. The policy envisions decarbonisation through various technologies, including solar, wind, and green hydrogen. However, land scarcity and local resistance pose obstacles to project implementation.
The target of 3,000 MW from rooftop solar by December 2025 may be overly ambitious given systemic constraints. Achieving targets requires significant annual investments, estimated at $933-980 million until 2030 and $1.37-1.46 billion a year until 2040.
The German Federal Ministry for Economic Cooperation and Development (BMZ) has committed funds in 2024 to support this expansion. The OPEC Fund has also mobilized over 1 billion USD for sustainable development finance, including allocations to Bangladesh. However, the policy lacks clarity on the governance structure and funding sources of the Sustainable Energy Development Fund.
Bangladesh's renewable energy transition requires substantial investment and policy clarity. Despite international support and ambitious targets, challenges such as land scarcity and local resistance must be addressed. The success of the transition depends on effective governance and funding mechanisms.
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