Decade after decade, Bangladesh's promising renewable energy (RE) sector remains stagnant due to the absence of a well-structured national policy, an investment-friendly environment and skilled leadership. Meanwhile, the country, struggling with a weak economy, has become highly dependent on costly fossil fuel imports, imposing a heavy financial burden on the lower and middle income people.

The high inflation triggers one of Bangladesh's worst economic crises in recent history. While other nations aggressively push for clean sources adoption, Bangladesh continues to lag behind in harnessing its vast solar and wind potential.

Ironically, the country's journey in RE began six decades ago-long before much of the world had even recognized electricity's transformative power. In 1962, Bangladesh (then East Pakistan) launched its first hydropower project at Kaptai, Rangamati, generating 80 MW of electricity.Fossil Fuel Dominance Hinders RE Investment: Bangladeshi entrepreneurs and experts have explained, investments in the RE sector are being discouraged due to policies that still favor fossil fuel businesses. Powerful players both global and domestic with vested interests continue to dominate the sector, creating an unfavorable investment policy in RE. As a result, both domestic and foreign investors are losing interest.

The previous governments had enacted laws allowing fossil fuel-based power plants to import equipment without tenders and enjoy tax-free benefits for importing machineries and power plants for up to 15 years. Similar incentives must now be extended to the RE sector no doubt.

To overcome the land crisis, we should establish of 10-12 RE hubs. Additionally, the government investment is needed in transmission line construction, upgrading from manual grids to smart grids, and improving battery storage systems. Most importantly Bangladesh must make its renewable energy sector bankable to attract large-scale local and foreign investments within a short timeframe.

$100 Billion Required to Meet RE Goals: The Integrated Energy and Power Master Plan (IEPMP), formulated by the previous government, set an ambitious goal of fulfilling 40% of Bangladesh's energy demand through clean sources by 2040. However, the interim government has declared new RE Policy for 2025, significantly lowering the target-setting it at just 20% by 2030 and 30% by 2041.

The key question remains: Is Bangladesh on track to meet its renewable energy goals? Considering the country's sluggish progress over the past 3 decades, the answer appears to be no. One of the biggest challenges investors face is securing adequate financing. Although Bangladesh Bank introduced a Green Finance Policy in 2009-10, banks have shown little interest in lending to the renewable energy sector.

In a recent discussion Mahfuz Ur Rahman Bhuiyan, Director of UCC Solar Limited, reiterated the need for renewable energy to be made bankable with low-interest, collateral-free loans to encourage private sector participation.

Stopping Political Influenced Projects: After the interim government assumed office in November last year canceled 31 RE projects. The primary allegations against these projects were that they were approved based on political considerations and corruption. Many inexperienced companies were awarded contracts, leading to prolonged delays and failure to complete projects.

At a recent press conference in Dhaka, energy experts criticized the government's proposed Draft RE Policy 2025, calling it too restrictive. Instead of promoting renewable energy expansion, the policy appears to protect the interests of the fossil fuel industry.

Barriers Must Be Removed: Entrepreneurs say that implementing renewable energy projects in Bangladesh remains a bureaucratic nightmare. The developing a project and simultaneously building a transmission line is nearly impossible for most of the investors. Moreover, there is no guarantee of selling electricity, and even when sales do happen, payments are often delayed for months.

They also allege that government institutions like the Bangladesh Power Development Board (BPDB) and the Bangladesh Rural Electrification Board (BREB) are not fully committed to renewable energy, which creates additional roadblocks. The many government buildings have unused rooftop space that could be utilized for net metering, but the lack of coordination between government agencies prevents its effective implementation.

News Link: Why our renewable energy sector falls behind