Gouranga Nandy
INTERNATIONAL days often pass with speeches, slogans and well-meaning declarations. What matters more is what remains once the banners come down. The recent global focus on clean energy offers such a moment of reckoning. Beyond the symbolism, it forces a harder question for countries like Bangladesh: are we genuinely transitioning towards clean energy, or merely rearranging old dependencies under a greener label?
The case for clean energy is no longer contested. Energy production remains the single largest contributor to global greenhouse gas emissions, placing it at the centre of the climate crisis. A shift towards renewable sources such as solar, wind and hydropower is essential not only for environmental protection but also for economic resilience. Clean energy investments generate significantly more jobs per dollar than fossil fuels, reduce exposure to volatile international fuel markets and strengthen long-term energy security. For developing economies, the transition is as much about stability and sovereignty as it is about sustainability.
Bangladesh’s energy story, however, is marked by contradiction. The country has achieved near-universal electrification, a significant development achievement. Yet this success has been built on a power system heavily dependent on fossil fuels. Gas still accounts for roughly 44 per cent of installed capacity, even as domestic reserves decline. This has pushed the government towards expensive liquefied natural gas imports, exposing the economy to global price shocks. Coal, promoted as a diversification strategy, has expanded rapidly, rising from about two per cent of capacity in 2015 to roughly a quarter today. High-cost furnace oil and diesel continue to play a substantial role, further inflating generation costs.
The result is an increasingly fragile energy system caught in what experts describe as an energy trilemma: balancing security, affordability and sustainability. Imported fuels have driven up subsidy burdens and placed pressure on foreign exchange reserves. During periods of global price volatility, fuel import constraints have translated into load-shedding, affecting households and industrial production alike. Gains in energy efficiency — estimated at around 13 per cent over the past decade — have helped cushion the impact, but they cannot compensate for structural dependence on fossil fuels.
Renewable energy, meanwhile, remains marginal. As of early 2026, solar, wind and hydropower together contribute only about four to five and a half per cent of total power capacity. Solar dominates this share, supported by utility-scale projects and a national rooftop programme targeting 3,000 megawatts. Wind power remains negligible, despite promising coastal potential, while hydropower is constrained by geography. This slow uptake sits uneasily beside official targets of 20 per cent renewable electricity by 2030 and 40 per cent ‘clean energy’ by 2041.
Part of the problem lies in how ‘clean energy’ is defined. Policy documents often include nuclear power and speculative technologies such as carbon capture within the clean energy basket. While these options may play a role in long-term planning, they compete directly with renewables for policy attention and financing, diluting momentum for solar and wind deployment. Clean energy, in practice, risks becoming a flexible label rather than a clear transition pathway.
Under its Nationally Determined Contribution, Bangladesh has committed to reducing greenhouse gas emissions by 6.73 per cent using domestic resources, and up to 21.85 per cent with international support, compared to a business-as-usual scenario. Achieving these targets requires a rapid scale-up of renewable capacity, including more than 900 megawatts of unconditional projects and up to 4,500 megawatts with external assistance. Yet renewable energy’s share remains stagnant at around five per cent. Bridging this gap will demand sustained annual investments of approximately $1.7 billion through 2041.
Finance is where ambition meets its sharpest constraint. While sustainable financing in Bangladesh has expanded significantly — reaching more than Tk 1.49 trillion in 2025 — renewable energy receives only a small fraction of this flow. Typically, between 2–7 per cent of green finance is directed towards renewables, with the majority absorbed by energy-efficient machinery in the garment sector or so-called green brick kilns. To meet the 2030 renewable target alone, annual investment must increase four to six times from current levels.
Banks remain cautious. Renewable energy projects often have longer payback periods, higher upfront costs and limited collateral options for small developers. Currency devaluation has raised equipment costs, while concerns over delayed payments from the Bangladesh Power Development Board further dampen lending appetite. Although Bangladesh Bank has introduced green financing windows and mandated minimum lending thresholds for green and sustainable finance, utilisation remains uneven.
Some policy signals are moving in the right direction. Tax holidays for new renewable plants, reduced duties on solar components and net metering regulations have improve project viability. Infrastructure Development Company Limited has begun shifting its focus towards large-scale rooftop and grid-connected projects. There is also growing discussion around credit risk guarantees to share project risk between banks and the state or development partners, a measure that could unlock domestic capital at scale.
Yet structural barriers persist. The Integrated Energy and Power Master Plan continues to prioritise LNG and coal, while grid modernisation required to handle variable renewable energy remains delayed. Without a smart grid capable of absorbing decentralised solar and wind generation, renewable expansion will remain constrained regardless of incentives.
Regional experience offers instructive contrasts. India’s rapid solar expansion, supported by subsidies and predictable policy frameworks, has driven costs below conventional grid power. Nepal, long associated with hydropower, is pairing solar with hydro to manage seasonal variability and positioning itself as a regional energy exporter through cross-border cooperation. These examples underline the importance of policy coherence and long-term certainty.
Bangladesh’s clean energy transition, then, is not stalled for lack of vision, but for lack of alignment. Targets, finance, grid readiness, and policy definitions remain misaligned. If clean energy is to move from aspiration to reality, it must be treated not as a supplement to fossil fuels, but as a structural priority. Without that shift, the transition risks remaining rhetorical.
Courtesy: The New Age, 28 January 2026.
