Governance, policy gaps slowing Bangladesh’s clean energy shift: Experts

Bangladesh's shift toward clean and affordable energy is being held back not by a lack of technology or investment interest, but by weak governance, policy inconsistencies, and the country's inability to tap into readily available international support, energy specialists and industry leaders warned today (10 December).

They noted that despite Bangladesh's strong solar and wind potential, the clean energy transition remains slow due to lagging policies, regulatory bottlenecks, and weak institutional coordination. As a result, foreign investment has stalled, renewable financing is underused, and the country remains heavily reliant on costly fossil fuel imports.

The concerns were raised at a roundtable organised by ActionAid Bangladesh collaborated with strategic partner TBS & Research partner Change Initiative titled "Redirecting Finance from LNG to Renewable Energy in Bangladesh", at a city hotel in the capital. 

The discussion, moderated by ActionAid's Kazi Morshed Alam, brought together representatives from government agencies, private-sector organisations, financial institutions, and development partners.

Change Initiative has conducted research on why the renewable energy transition has not gained traction, while increased LNG financing is draining the country.

Quoting the research, M Zakir Hossain Khan, chief executive of Change Initiative, said, "Bangladesh's heavy LNG dependence is creating major financial stress through rising forex loss, volatile import prices, and over a trillion taka in capacity payments."

He said evidence from cases like the 800 MW Rupsha plant highlights severe stranded-asset risk, and community impacts in Moheshkhali reveal displacement and livelihood loss linked to LNG-linked infrastructure.

Abul Kalam Azad, manager at ActionAid Bangladesh, talked about the economic and environmental risks associated with rising dependence on imported LNG.

He said, "It is time to think about alternatives like renewable energy because green energy component prices are falling sharply."

"It's high time we must admit LNG is a financial trap for our country, and we must move away from the expensive energy venture," Azad added.

Shafiqul Alam, lead energy analyst for Bangladesh at the Institute for Energy Economics and Financial Analysis (IEEFA), warned that the country's power system remains deeply import-dependent, with more than half of last year's 58 million tonnes of oil equivalent sourced from abroad.

"This reliance has pushed industrial gas prices up by 260% and sharply increased costs for power generators," he said. "Energy efficiency has already saved the country billions, and scaling it further is the fastest and most cost-effective way to reduce imports.

"Renewables offer real potential, but success depends on coordination, the right mindset, and practical actions that reduce costs and attract investment."

Md Delowar Hossain, joint director of Bangladesh Bank's Sustainable Finance Department, stressed the need to prioritise rooftop solar amid land constraints.

He proposed opening a concessional lending window under banks' Climate Risk Funds, where banks would lend at reduced rates, and the fund would compensate the difference.

"This could scale rooftop solar without burdening banks or borrowers," he said.

IDCOL Chief Investment Officer Nazmul Haque said the transition cannot rely on solar alone. "Even if we meet the 20% renewable target by 2030, the remaining 80% will still come from fossil fuels, and LNG will remain essential for industry," he noted.

He added that energy conservation remains the cheapest strategy, with the potential to save nearly half of current electricity consumption without new investment.

Nuria Lopez, chairperson of the European Union Chamber of Commerce in Bangladesh (EuroCham), urged Bangladesh to use the international renewable energy financing already accessible.

"Bangladesh has no fuel of its own, yet it sits on enormous solar and wind potential," she said. "EU renewable funds remain unused due to institutional bottlenecks. Reliable renewable energy is crucial to attract foreign investment."

Nure Alam, COO (Renewable Energy) of RFL Group, cautioned that proposed increases in wheeling charges — up to three times the current rates — would render merchant solar projects unviable. "Inconsistent surcharges erode investor confidence," he said.

Dhaka University Professor Badrul Imam said that outdated and fragmented policies are at the core of the transition delays. "Our policies are outdated, fragmented and disconnected from today's realities," he said.

Representing Petrobangla, Md Ruhul Amin pointed to declining domestic gas output and tariff mismatches, calling for urgent exploration and price rationalisation.

A joint secretary from the Energy Division stressed the need for bold, practical measures to harmonise policies, institutions, and investments with global compliance requirements, including the EU's Carbon Border Adjustment Mechanism (CBAM).

The roundtable also featured contributions from Zahidul Alam, senior vice president of BSREA; Abu Hena Mostofa Kamal, director of Renewable Energy Pte Ltd; Mir Md Ahsan Huda of LONGi; Naznin Akther, director at Solaric; Kazi Morshed Alam, head of programme and engagement at ActionAid Bangladesh; and Anwar Hossain, deputy programme manager at Islamic Relief Bangladesh.