ADB's fossil fuel investments deepening Bangladesh's energy crisis, experts warn

Bangladesh's mounting energy and economic strains are being intensified by the Asian Development Bank's (ADB) decades-long emphasis on fossil fuel financing, a new analysis revealed at the Bangladesh Energy Conference 2025 today (7 December).

Experts and civil society groups cautioned that the bank's gas-heavy investment model is steering Bangladesh toward an increasingly costly, risky, and unsustainable energy pathway, even as the rest of the world accelerates toward cleaner and more resilient alternatives.

Presenting the report titled "MDBs in the Energy Sector of Bangladesh," Sarmin Akter Bristy, Fossil Fuel Campaigner at the NGO Forum on ADB, said the ADB's approach is "locking Bangladesh into an expensive and unstable energy model," noting that renewable energy remains severely underfunded.

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Rayyan Hassan, Executive Director of the Forum and moderator of the session, warned that the ADB's "one-sided, fossil-heavy investment blueprint" deepens the country's vulnerability to fuel shortages, rising debt, and escalating climate threats.

On the same day, a session titled "Problems and Potentials of RE Application in Bangladesh" underscored persistent policy bottlenecks that have stalled renewable energy expansion despite Bangladesh's significant solar potential.

"Industrial solar has hogged the spotlight, while rooftop systems – especially in homes – are barely functional," said Anwar Hossain, Executive Director of Earth. "Nearly 90% of rooftop solar systems are idle, installed mostly for compliance rather than generation. If even a portion of these ran properly, the grid would receive a meaningful electricity boost."

Mostofa Al Mahmud, President of the Bangladesh Solar and Renewable Energy Association (BSREA), said invisible barriers continue to suppress renewables.
"A meeting was held months ago to lower tariffs on solar panels and equipment," he noted. "Nothing moved afterward. It's clear that some forces are actively resisting progress."

Energy Finance Researcher Sheikh Ruhul Amin argued that Bangladesh must rethink its renewable targets if it wants serious investment.
"Major funders like the ADB say the current goals are not bankable," he said. "Ambitions must be realistic, aligned, and financially sound if Bangladesh aims for 20–30% renewable energy in the power mix."

Fossil fuel funding dominates ADB portfolio

According to the NGO Forum's analysis, the ADB has committed $92.1 billion to 570 energy projects across South Asia. Bangladesh alone received $17.34 billion for 106 projects, including nearly $5.995 billion in gas-focused ventures.

Much of this investment is loan-based. About 60% came from the Technical Assistance Special Fund, 36% from high-interest Ordinary Capital Resources (OCR), and just 4% from the concessional Asian Development Fund.

Since the early 2000s, the ADB has shifted toward financing gas-fired power plants, pipelines, and efficiency upgrades. Major tenders included the Sirajganj and Meghnaghat 450 MW plants. Funding covered power plant construction, gas pipelines, sector development, and master planning.

Private ventures – such as GEE, Pendeker, Summit, JERA –Reliance, and NWPGCL – also secured significant financing, including $500 million for the Reliance Meghnaghat 715 MW plant, one of the country's largest gas-fired facilities.

Idle plants, mounting losses

The report points to severe economic losses stemming from ADB-financed power plants that remain idle due to gas shortages or missing supply infrastructure.

Two flagship projects – the Rupsha 800 MW and Reliance Meghnaghat 715 MW plants – are fully built yet non-operational. Under OCR loan terms, Bangladesh must still pay hefty capacity charges despite producing no electricity.

"These idle plants are turning into financial sinkholes," the report warns, adding that the burden is ultimately transferred to taxpayers and consumers.