Financing hurdles threaten $188m RMG solar opportunity for Chinese FDI: CPD
The study found 1,768MWp of rooftop solar potential across 3,320 factories, but only 509 would be investment-ready at a blended financing rate of 9.8%, with the number falling to zero at commercial rates of 10.5%.
Highlights:
- $188.2m rooftop-solar investment pipeline identified in RMG sector
- 2,303 factories found technically and economically viable for rooftop solar
- 509 factories investment-ready at 9.8% blended financing rate
- CPD calls for concessional and Chinese green financing to unlock projects
- Chinese investors urged to pursue bundled solar projects in industrial clusters
A $188.2 million rooftop-solar investment pipeline has emerged across Bangladesh's RMG and textile sector, but high borrowing costs could leave much of the opportunity untapped unless concessional and Chinese green financing can be brought in, according to a new study by the Centre for Policy Dialogue (CPD).
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The study identified 2,303 factories as technically and economically viable for rooftop solar, including 1,922 small, 320 medium and 61 large factories. Small factories represent the largest aggregate investment requirement at $75.7 million, followed by medium factories at $66.6 million, and large factories at $45.7 million.
The findings were presented at the fifth Bangladesh-China Renewable Energy Forum, titled "Industrial Rooftop Solar in RMG Sector: Investment Potential under Chinese FDI Lens", organised by CPD's Power and Energy Studies programme at BRAC Centre in Dhaka today (20 August).
CPD Research Director Khondaker Golam Moazzem moderated the event.
CPD Research Associate Abrar Ahammed Bhuiyan and Noor Yana Jannat, who presented the study, said the large number of small factories makes individual project financing difficult, creating scope for bundled investment and Build-Own-Operate-Transfer (BOOT) models.
Moazzem said factories in industrial clusters such as Gazipur and Narayanganj could be aggregated into multi-megawatt portfolios, allowing Chinese renewable-energy service companies (RESCOs) and engineering, procurement and construction (EPC) firms to invest at scale rather than negotiate separate deals with individual factories.
The study mapped 9.73 million square meters of usable rooftop area across 3,320 factories, estimating total rooftop solar potential at 1,768.3 MWp. Rooftop solar could meet a median 39.9% of electricity demand in large factories, 33.1% in medium factories and 38% in small factories.
Financing conditions could determine whether the pipeline becomes investable. The study found that 509 factories would qualify as investment-ready at a blended financing rate of 9.8%, while the number falls to zero at commercial rates of 10.5%.
It also found that capital costs, electricity tariffs, interest rates and loan tenure can each significantly affect project bankability.
The CPD proposed combining IDCOL's 5-7% concessional financing with Chinese green investment capital, alongside portfolio-based financing for small and medium factories.
Moazzem also urged the government to establish a 10-year policy facilitation window through 2036, with administrative, legal, technical and financial procedures simplified or fast-tracked to support large-scale rooftop-solar deployment.
The opportunity comes as Bangladesh's export-oriented manufacturing sector faces persistent energy shortages. The RMG sector accounts for around 85% of national export earnings, while gas shortages and grid instability have pushed factories to operate at only 30-40% of capacity, according to the CPD presentation. At the same time, international apparel buyers are tightening decarbonisation requirements.
Ha-Meem Group's experience illustrates both the viability of rooftop solar and the challenges of scaling it.
Tanzeen Chakraborty, head of power, energy and environmental sustainability at Ha-Meem Group, said its first 12.2MWp solar phase succeeded with concessional financing, enabling its Kaliganj facility to meet its daytime electricity demand from solar.
However, its subsequent 17MW phase has been waiting for more than two months for Sreda equipment and inverter approval. The project has also faced metering coordination problems between REB and PGCB, resulting in billing complications.
The first 12.2MWp phase received financing at 5-7%, including a 20% principal waiver worth Tk7.2 crore. At the Kaliganj facility, solar now meets daytime demand between 10am and 3pm, while feeder-level load-shedding has been discontinued.
The CPD study identified high financing costs for SMEs, lengthy Sreda approval processes, structural limitations of older factory buildings, inconsistent net-metering practices among utilities and the absence of third-party power-wheeling arrangements as key barriers.
Representatives from Bida and BREB stressed the need for stronger coordination among investment agencies, utilities and factory owners to resolve grid-connectivity and technical issues and make foreign investment approvals more predictable.
The CPD recommended that BGMEA establish a dedicated facilitation desk for factories partnering with vetted Chinese EPC firms, while BKMEA could aggregate small and medium knitwear factories in industrial clusters such as Narayanganj and Gazipur into consolidated multi-megawatt portfolios.
It also called for faster Sreda interconnection approvals and financing structures that would allow Chinese investors to participate in bundled projects rather than thousands of individual factory-level deals.
