Bangladesh’s energy experts warn that decades of ADB-backed fossil fuel investments are worsening the country’s fuel shortages, financial stress and climate risks, urging a rapid shift to renewables as new analysis shows gas-heavy projects remain idle, costly and environmentally damaging.

The Asian Development Bank’s (ADB) long-standing focus on fossil fuel financing is worsening Bangladesh’s energy, economic and environmental vulnerabilities, civil society experts warned Sunday, urging a decisive shift toward low-cost renewable power.

At the Bangladesh Energy Conference 2025, speakers said ADB’s reliance on gas-based power is locking the country into an “expensive and unstable” energy pathway while renewables remain critically underfunded despite global momentum behind clean energy.

The findings were presented in a new report, “Multilateral Development Banks (MDBs) in the Energy Sector of Bangladesh,” by Sarmin Akter Bristy, Fossil Fuel Campaigner at the NGO Forum on ADB. Moderating the session, the Forum’s Executive Director Rayyan Hassan said the bank’s “one-sided, fossil-heavy investment model” heightens Bangladesh’s exposure to fuel shortages, mounting debt and intensifying climate impacts.

Rooftop solar ‘ignored’, tariffs still unreformed

A parallel session titled “Problems and Potentials of RE (Renewable Energy) Application in Bangladesh” underscored persistent policy hurdles holding back renewable energy deployment.

“Industrial solar installations have received far more attention than rooftop systems. Yet nearly 90% of home-based rooftop solar setups remain non-functional, installed mostly for compliance rather than actual generation,” said Anwar Hossain, Executive Director of Earth. “If these systems operated properly, a substantial amount of electricity could be added to the national grid.”

Mostofa Al Mahmud, President of the Bangladesh Solar and Renewable Energy Association (BSREA), said the sector still lacks meaningful financial incentives. “Invisible barriers persist,” he said. “A meeting was held months ago to reduce tariffs on solar panels and equipment, but no action followed, indicating forces actively resisting progress.”

Energy finance researcher Sheikh Ruhul Amin cautioned that Bangladesh’s renewable energy targets are not aligned with investor confidence. “If Bangladesh aims to achieve 20–30% renewable energy in its power mix, policymakers must revisit current targets,” he said. “Major funders, including the ADB, have expressed concern these goals are not bankable. Unaligned targets pose significant financial risks.”

Gas-heavy portfolio, minimal support for renewables

According to the NGO Forum’s analysis, ADB has committed $92.1 billion to 570 energy projects in South Asia. Bangladesh alone received $17.34 billion for 106 projects, including $5.995 billion for 36 gas-focused projects supporting 3,659 MW of capacity.

ADB’s gas financing in Bangladesh is overwhelmingly loan-based:

• 60% ($3.603 billion) from its Technical Assistance Special Fund

• 36% from high-interest Ordinary Capital Resources

• Only 4% from concessional Asian Development Fund support

From the late 1970s to the early 1990s, ADB funding backed planning and efficiency measures. But since 2000, the bank has shifted sharply to direct financing of gas-fired plants and transmission infrastructure, including major support for Sirajganj and Meghnaghat power projects.

In total, ADB financed:

• $1.232 billion for power plant construction

• $1.12 billion for pipelines

• $703.6 million for gas sector development

• $660 million for planning

• $600 million for the Power System Master Plan

• $1.393 billion for other gas-related projects

Private-sector beneficiaries include GEE, Pendeker, Summit, JERA–Reliance and NWPGCL, with direct financing such as $75 million for Bibiyana II, $200 million for Rupsha 800 MW, and $500 million for the Reliance Meghnaghat 715 MW plant.

Idle plants, rising debts

The report warns of mounting financial losses from ADB-backed plants unable to operate due to fuel shortages or incomplete infrastructure. The fully constructed Rupsha 800 MW and Reliance 715 MW plants remain idle, forcing Bangladesh to pay large capacity charges despite producing no electricity. “These projects represent the costliest form of energy insecurity, plants ready to run but starved of fuel,” Bristy said.

Massive climate footprint, social disruption

ADB-backed gas plants are projected to emit a combined 174.71 million tons of CO₂ over their operational lifetimes. The installations, spanning more than 160 acres along the Meghna, Meghnaghat and Bhairab rivers, have contributed to livelihood losses, displacement and long-term social impacts, the report found.

Renewables ‘left behind’

• By contrast, ADB’s renewable energy support in Bangladesh remains marginal:

• 225.8 MW of solar financed

• $118 million invested in solar

• Zero investment in wind energy

• 91.34% of all energy financing directed to gas, compared with just 8.66% to solar

New ADB policy raises concerns

Civil society groups also criticised ADB’s four amendments to its 2021 Energy Policy, approved on 24 November, which:

• Lift a ban on nuclear financing

• Support critical mineral supply chains

• Allow Carbon Capture and Storage (CCUS) using depleted wells

• Back methane leakage and flaring reduction

Experts say the changes reflect a turn toward high-risk, high-cost technologies rather than the affordable clean energy solutions Bangladesh urgently needs.

News Link: ADB’s fossil fuel investments ‘deepening Bangladesh’s energy crisis,’ experts warn