Advancing energy sovereignty for Bangladesh: Securing a resilient and sustainable future
The roundtable was chaired by CPD Executive Director Fahmida Khatun and moderated by TBS Deputy Editor Sajjadur Rahman.
Highlights:
- Bangladesh faces growing energy insecurity from fuel import dependence
- Middle East tensions expose risks to global fuel supply chains
- Imported fuel dependence rises to 62%
- Solar expansion hindered by land scarcity and grid limitations
- Offshore wind projects could generate around 4,000MW
- Energy sector criticised for corruption and lack of transparency
- Experts call for stronger grid flexibility for solar integration
- Energy efficiency improvements could reduce demand by 25-30%
- Bangladesh's energy future under pressure on import dependence
A roundtable, titled "Advancing Energy Sovereignty for Bangladesh: Securing a Resilient and Sustainable Future," was held at The Business Standard conference room and jointly organised by the Embassy of Denmark, The Business Standard, and the Centre for Policy Dialogue (CPD). It was chaired by CPD Executive Director Fahmida Khatun and moderated by TBS Deputy Editor Sajjadur Rahman.
Dr Fahmida Khatun
Executive Director of CPD
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Bangladesh is at a critical "crossroads" as it prepares to graduate from LDC status. While industrial growth has surged, the nation's energy system remains dangerously unstable due to a heavy reliance on imported fossil fuels.
Current geopolitical tensions, specifically the Middle East crisis and potential disruptions in the Strait of Hormuz (a transit point for 20% of global oil and gas), highlight the extreme risk of import dependence. Recent price hikes following the Ukraine war led to depleted foreign reserves, high inflation, and industrial disruption. Fuel price volatility is not just an economic issue; it is a matter of national security.
To achieve energy sovereignty, Bangladesh must shift from "lessons to action." Currently, renewable energy accounts for only 5.3% of total production. Despite challenges like land scarcity and grid limitations, scaling solar power and clean energy is essential to decouple the economy from the unpredictable international market and meet Paris Agreement goals.
Anders Karlsen
Deputy Head of Mission at the Danish Embassy
The current global fuel crisis reinforces the urgent need for a transition towards sustainable development. The volatility of the global market makes the case for renewable energy stronger than ever.
From the Danish perspective, scaling up renewables is no longer just about environmental conservation; it is a strategic necessity for achieving energy sovereignty. By reducing reliance on external fuel sources, nations can gain greater control over their economic future.
Bangladesh possesses significant capacity and potential to shift its energy mix. Denmark remains a committed partner, ready to share technical expertise and support Bangladesh's efforts to build a resilient, green energy infrastructure. This collaboration aims to turn global energy challenges into an opportunity for long-term self-reliance and stability.
Md Rafiqul Alam
Additional Secretary (Company Affairs), Energy and Mineral Resources Division
Energy sovereignty should be understood as the strategic control over the resources, production, and infrastructure required to meet total national energy demand. While energy security focuses on ensuring smooth supply chains and access for the public, energy sovereignty demands a broader mixed-energy strategy. This must balance fossil fuels with cleaner alternatives such as nuclear power, alongside intermittent renewable sources like solar, which can realistically meet only around half of demand because they cannot generate electricity at night.
A major concern is the mismatch in demand forecasting. To bring a projected population of 25 crore by 2050 into the economic mainstream, Bangladesh would require around 100,000MW of installed capacity. Even if solar panel efficiency improves significantly, to as high as 40%, land constraints mean that rooftop installations and government-supported systems could contribute only about 10,000MW.
To manage these anticipated energy shocks, the government is developing long-term absorption strategies. These include possible duty waivers in the upcoming budget to encourage infrastructure investment and help secure the country's future energy mix.
M Shamsul Alam
Energy Adviser, CAB
Bangladesh's energy sovereignty has been compromised by systemic corruption and "looting." While official figures claim a 5% contribution, the actual generation in kilowatt-hours is barely 1%.
This failure can be attributed to the Quick Enhancement of Electricity and Energy Supply Act, which was used to bypass competitive bidding and allowed what he described as a small class of oligarchs, including figures such as S Alam and Salman F Rahman, to capture the market.
This has turned the energy sector from a public service into a "looting ground" where the government pays up to Tk15 per unit for electricity that could be produced for approximately Tk4 through competitive solar projects. International lenders like the IMF and World Bank are pushing for "irrational" price hikes that burden the common people.
To reclaim sovereignty, I demand the trial of energy criminals to establish accountability and prevent the emergence of future oligarchs. The government must move away from top-down ministerial committees and instead determine energy pricing through public hearings.
We must adopt a "bottom-up" approach to solar power – utilising rooftops and irrigation fields – to build a sustainable, pro-people energy system that is no longer a victim of domestic corruption or global fuel price volatility.
Md Ziaul Haque
Additional Director General, Department of Environment
I think energy sovereignty has now escalated into a vital matter of national security. As domestic natural gas reserves – historically a "cleaner" bridge fuel – rapidly diminish, Bangladesh faces a worrying level of dependence on imported fossil fuels.
To address this, the government has shown ambitious political will as outlined in the Renewable Energy Policy 2025 and the NDC3 submission under the Paris Agreement. These frameworks commit Bangladesh to achieving a 25% renewable energy share by 2035 and generating 10,000MW from clean sources by 2030, a goal that requires increasing existing capacity fivefold.
To bridge the gap between policy and implementation, we are discussing practical strategies such as utilising industrial rooftops to target 3,000MW and exploring offshore wind power, targeting 4,000MW, in collaboration with Danish expertise. The DOE is also working with the NBR to offer a 40 to 50% rebate on the 1% "Environment Protection Surcharge" for industries that invest in solar systems or water recycling.
While acknowledging past failures in inter-ministerial coordination, the department has begun rigorous monitoring of coal-based plants like Rampal and Payra, signalling a shift towards a "whole-of-government" approach to environmental compliance and sustainable energy.
Ijaz Hossain
Former BUET professor and energy expert
Bangladesh's energy sovereignty must be understood in practical terms, not aspirational targets. While renewable capacity figures vary, actual renewable energy penetration remains critically low at around 2.3%. Even in India, despite its vast solar infrastructure, solar power contributes only about 10-12% of total electricity generation.
As an engineer, I do not see a 100% renewable energy system as achievable for Bangladesh due to severe land scarcity and the extremely high cost of battery storage, which could push electricity prices as high as Tk26 per kilowatt-hour. Bangladesh is already about 62% dependent on imported fuels, and this dependency is increasing each year, which is a deeply concerning trend.
Past policies also created unintended consequences. For example, the push for full grid electrification contributed to the decline of around 6 million solar home systems, leading to significant rural load shedding issues.
At the same time, there is potential in offshore wind energy, with a target of around 4,000MW supported by carbon financing. The government is also expected to remove tax barriers on renewable energy in the upcoming budget. However, the real solution lies in combining renewable energy expansion with large-scale energy efficiency improvements, potentially reducing demand by 25-30%. In my view, the most realistic pathway for Bangladesh is achieving around 30-35% renewable energy, supported by efficiency gains and limited fossil fuel imports, to ensure long-term energy security.
M Asaduzzaman
Former Research Director, Bangladesh Institute of Development Studies (BIDS)
Energy sovereignty transcends simple security; it is about accessibility, community empowerment, and democratic decision-making. Bangladesh has an installed power generation capacity of 31,000MW, yet only around 50% is being generated, leading to inequitable load shedding in rural areas.
True sovereignty lies in renewable energy because sunlight and wind are resources that no external power can seize. While the country's gas reserves are depleting, with an estimated 13 years remaining, renewables currently account for only 2% of power generation.
To address the storage crisis, we can develop jute-stick-based graphene for batteries. As Bangladesh is a leading producer of jute, investment in this sector would empower local communities and women while reducing dependence on rare minerals such as lithium.
Sovereignty must ultimately be exercised at the community level, shifting power from "Upazila Rajas" to the people.
Alamgir Morshed
CEO of IDCOL
It is unfortunate that Bangladesh's once-reputed Solar Home System programme, which had generated 200MW of electricity, was effectively destroyed after policymakers became overly focused on fossil fuel-based power plants. Energy sovereignty should be understood as maintaining a strategic balance among different energy sources so that no single market or supplier can dictate terms to a country.
Vietnam achieved rapid success in solar energy, while Pakistan adopted it out of necessity during its energy crisis. Bangladesh already has the required technology and engineering talent, but what is missing is the collective intention to implement existing plans.
There is also a major gap in financial literacy in the banking sector. Many commercial bankers struggle to finance solar projects because they lack the specialised knowledge needed to forecast variables such as sunshine levels and seasonal weather patterns.
To bridge the annual billion-dollar funding gap required to meet national targets, Bangladesh must move beyond conventional lending and introduce creative non-funded risk-sharing tools. Development partners could provide AAA-rated guarantees to local banks so they can offer Taka-based financing at lower costs.
We also need a more business-friendly customs and regulatory environment to facilitate the import and installation of solar infrastructure. At the same time, there must be a shift in mindset. Even many leaders in the sector fail to lead by example by installing solar systems on their own rooftops.
We have enough discussions and recommendations at conferences like this, but the real question is whether these expert recommendations are ever truly incorporated into government policy.
Sakib Bin Amin
Professor, Department of Economics, North South University
Energy sovereignty must be viewed as a complete transformation of the market system rather than simply replacing one fuel with another. Bangladesh has long relied on shock-driven policymaking. Although many energy policies have been adopted since 2008, the country still lacks the quantitative mechanisms needed to measure their effectiveness.
To build a resilient energy future, Bangladesh needs long-term policy coherence along with regular and mandatory policy revisions based on accurate demand forecasting. A cost-reflective and competitive pricing structure is also essential to attract private and foreign investment, as investors currently face significant market barriers.
Institutional strengthening is another prerequisite for achieving energy sovereignty. The Bangladesh Energy Regulatory Commission must become fully independent and autonomous. At the same time, institutions such as Bapex and BPC should be strengthened so they can prioritise the exploration of indigenous natural gas as a critical long-term bridge towards a sustainable energy mix.
Shafiqul Alam
Lead Energy Analyst, IEEFA
Energy sovereignty requires a fundamental transformation of the entire market system rather than a simple substitution of fuels. Although Bangladesh has adopted numerous energy policies, it still lacks the mechanisms needed to measure their effectiveness and monitor implementation properly.
A cost-reflective and competitive pricing system is essential to attract private investment into the sector. At the same time, institutions such as the Bangladesh Energy Regulatory Commission, Bapex, and BPC must be strengthened to prioritise the exploration of indigenous natural gas resources.
Mesbaul Asif Siddiqui
DMD and Head of Wholesale Banking, City Bank PLC
Financial stability is the bedrock of energy security. We are in a severe "quagmire" where the BPDB has delayed payments to private power plants for up to nine months, pushing many to the verge of default.
This liquidity crisis is compounded by a structural misalignment where commercial banks, relying on short-term deposits, act as the primary lenders for long-term energy projects – creating a systemic risk. The interim government's decision to cancel 31 renewable projects and move away from sovereign guarantees, such as Implementation Agreements and Power Purchase Agreements, has severely damaged investor and lender confidence. Without these "comfort factors", neither local nor foreign financiers will support the massive investments needed for the energy transition.
To bridge the gap toward energy sovereignty, we must adopt a pragmatic transition period where fossil fuel-based plants are supported while we gradually scale up renewables. The government should also leverage high-performing private banks by designating them as Designated Access Entities for international climate funds, as current state-owned channels like Idcol cannot meet the necessary scale alone.
The government must rapidly invest in a second refinery to increase domestic processing capacity, expand national fuel storage to withstand geopolitical shocks, such as crises in the Middle East or Ukraine and immediately resolve the backlog of unpaid bills to restore trust in the government's sovereign commitments.
Tanzina Dilshad
Program Manager (Environment and Energy), European Union Delegation to Bangladesh
The €3.8 billion Team Europe initiative includes a dedicated €1.3 billion allocation for renewable energy. A key component of this initiative is the Bangladesh Renewable Energy Facility, which offers concessional loans from the European Investment Bank and grant support for green energy projects.
However, funding alone will not be enough. The main challenge is the shortage of bankable projects. For international financing to flow into Bangladesh, projects must meet high environmental, social, and legal standards. There is also an urgent need to develop a long-term pipeline of projects capable of attracting leading European technology companies.
To ensure energy sovereignty, Bangladesh must immediately focus on improving grid flexibility and reliability so that intermittent solar power can be integrated effectively into the energy system. The country should also explore regional energy markets and promote local manufacturing of components such as inverters and energy storage systems to improve affordability and achieve scale.
Kazi Kareena Arif
Research Analyst at Change Initiative
Bangladesh should pursue a nature-smart, energy-led sovereignty pathway that prioritises ecosystem rights, community consent, and local ownership rather than focusing solely on accessibility.
Concerns over land scarcity should not prevent the expansion of renewable energy. Bangladesh can achieve its renewable energy targets without compromising food sovereignty by adopting a zero-arable-land strategy centred on industrial rooftops, floating solar systems, and solar-powered irrigation.
To ensure accountability, the country can introduce innovative financing instruments such as Greece's Step-Up Sustainability-Linked Bonds. Under this model, if the government fails to achieve its carbon reduction or renewable energy targets, the bond's interest rate automatically increases. This mechanism would provide reassurance to cautious investors while also creating a direct financial incentive for the government to remain transparent and fulfil its climate commitments.
Md Newazul Moula
Coordinator at TIB
The main barrier to achieving energy sovereignty is the entrenched presence of energy criminals and fossil fuel lobbyists who have looted the sector for decades. Energy sovereignty cannot be achieved unless these actors are held accountable and the cycle of corruption that influences high taxes on sustainable alternatives is broken. For example, electric scooters remain nearly three times more expensive than conventional motorcycles because of the absence of meaningful incentives.
Bangladesh can achieve 100% renewable energy through transparent and efficient space management. However, many renewable energy projects are now repeating the same mistakes seen in fossil fuel-based projects, including forcible land acquisition and inflated project costs.
To achieve true energy sovereignty, the country needs a transparent and flexible policy environment that removes bureaucratic barriers such as those currently obstructing the implementation of net metering.
Rumana Rashid
Director of BGMEA
Energy instability, particularly inadequate gas and electricity supply, is severely hindering the ready-made garment sector. As Bangladesh moves towards LDC graduation and compliance with GSP+ requirements, European buyers are increasingly demanding environmentally sustainable production.
To meet these standards, the BGMEA is collaborating with international partners on decarbonisation initiatives and energy audits for 500 factories. However, one of the biggest obstacles to adopting solar power is the high cost of imports. The total tax incidence on solar equipment is excessively high, ranging from 28.73% on solar panels to nearly 40% on inverters.
These taxes should be reduced to 1% immediately. Lowering these financial barriers would enable factories, especially SMEs, to invest in renewable energy, ensure smoother energy supply, and maintain Bangladesh's global competitiveness in the export market.
