the twenty-first century, energy has become the backbone of industrial development and sustainable economic growth. As nations collectively push toward decarbonisation to combat climate change, renewable energy is gaining unprecedented global attention.
Projections indicate that renewables will supply nearly 60% of global electricity by 2030 and close to 90% by 2050. This massive shift from fossil fuels to zero-carbon sources is not merely a technological evolution, it is a systemic transformation of the world’s energy landscape.
It also aligns directly with the United Nations Sustainable Development Goals, particularly SDG 7, which emphasizes universal access to affordable, reliable, and modern energy services. For developing countries, achieving this goal is crucial for unlocking economic potential, strengthening social equity, and charting a pathway toward a greener and more resilient future.
Bangladesh is no exception to this global momentum. Despite its vulnerability to climate change, the country is making visible strides toward energy transition. However, Bangladesh still lags behind many Asian countries in renewable energy adoption. Per-capita electricity consumption stands at just 146.5 kilowatt-hours (kWh), far lower than India’s 480.5 kWh or Pakistan’s 456.2 kWh.
Electricity generation in Bangladesh remains heavily reliant on conventional sources such as natural gas and furnace oil. Yet, with domestic gas reserves shrinking, estimated recoverable reserves at 8 trillion cubic feet (Tcf) expected to run out within a decade, the urgency to diversify energy sources has become unavoidable. To confront these challenges, the government has outlined ambitious renewable energy goals: generating 20% of electricity from renewable sources by 2030 and 30% by 2040. These targets stem from three major considerations: the global shift toward sustainable energy systems, the country’s dwindling fossil fuel reserves, and its national development agenda rooted in the Sustainable Development Goals.
Together, they make a strong case for Bangladesh to accelerate its renewable energyadoption. A sustainable transition will not only help reduce import dependency and enhance energy security but also reinforce economic growth and environmental protection.Bangladesh’s current installed power generation capacity has surpassed 27,000 megawatts (MW). Although renewable energy accounts for just over 5% of the electricity mix, the country has demonstrated steady progress. Total installed renewable capacity stands at 1,547.03 MW, dominated overwhelmingly by solar energy. Solar power alone contributes 1,253.94 MW, with 876.78 MW connected to the national grid and 377.17 MW functioning off-grid. Wind energy contributes 62 MW, hydropower 230 MW, and biogas and biomass together add just over 1 MW.
While this growth is encouraging, it still falls short of the scale needed to achieve the country’s long-term renewable energy ambitions. One of the main barriers hindering Bangladesh’s energy transition is the lack of advanced technology, skilled human resources, and adequate financing.
As a developing nation, Bangladesh faces constraints in mobilizing sufficient capital to implement large-scale renewable energy projects independently. The need for foreign investment, therefore, becomes critically important not only for financing but also for transferring knowledge, enhancing technical skills, and strengthening institutional capacity.Bangladesh has attracted investments from a diverse set of countries, including the United Kingdom, Hong Kong, the Netherlands, the United States, and China. Among them, China has emerged as the single-largest investor in the energy sector. In 2023 alone, China invested $667 million—significantly higher than many other contributing nations. China has financed several large-scale renewable projects, including a 300 MW solar power plant in Rampal, Bagerhat, a 70 MW solar project in Pabna, and a 55 MW wind power project in Mongla. These initiatives demonstrate China’s expanding role in supporting Bangladesh’s clean energy ambitions.
China’s global standing in renewable energy further strengthens its importance as a partner. With $676 billion invested globally in clean energy in 2023 representing 38% of worldwide investments, China leads the world in green technology development, manufacturing, and deployment. Chinese-made solar panels, batteries, and wind turbines dominate global markets due to their affordability and technological advancements. This gives Bangladesh a unique opportunity to access cost-effective renewable technologies at scale. Additionally, China’s Belt and Road Initiative (BRI), launched in 2013 and joined by Bangladesh in 2016, further enhances bilateral cooperation across infrastructure, energy, and transportation. For countries in the Global South, including Bangladesh, the BRI has opened new avenues for financing development projects that would otherwise remain out of reach. Within this framework, renewable energy has become a major focus, especially as China has announced that it will no longer finance coal-based power projects abroad.
However, the increasing dependence on Chinese investment also brings challenges. One major concern arises from environmental and social impacts associated with some earlier China-backed coal projects in Bangladesh, most notably Payra and Banshkhali. Local protests and environmental criticisms highlight the risks of inadequate environmental assessments and insufficient community engagement. Such experiences underscore the need for stringent environmental and social safeguards in future renewable energy collaborations. Another challenge lies in potential over-reliance on Chinese financing and technology. While Chinese equipment is cost-competitive, heavy dependence may limit the development of domestic renewable energy industries and technical expertise. Without strong local capacity-building strategies, Bangladesh may find itself reliant on external support for maintenance, technology upgrades, and long-term system integration.From the perspective of foreign investors including China, Bangladesh’s governance environment itself presents several obstacles. Complex bureaucratic systems, slow decision-making, and limited coordination among government agencies frequently delay project implementation. The abrupt cancellation of 31 large-scale solar projects after issuing Letters of Intent representing nearly 3,300 MW of potential energy and around US$6 billion in investment, has raised concerns internationally. Such unpredictable policy shifts undermine investor confidence and create hesitation regarding long-term commitments. Policy instability is another critical concern. Investors require consistent laws and clear regulatory guidelines to make multi-million-dollar decisions. When project approvals, tariff policies, land acquisition rules, or power purchase agreements shift unexpectedly, foreign investors become cautious, often opting for alternative markets with more predictable environments.Despite these challenges, China remains a vital strategic partner for Bangladesh’s energy transition. President Xi Jinping’s pledge to avoid financing new coal projects abroad and instead prioritize renewable energy aligns well with Bangladesh’s long-term sustainability vision. China’s leadership in manufacturing cost-effective green technologies makes renewable energy deployment more financially viable for Bangladesh. Additionally, strong diplomatic ties and a history of bilateral cooperation strengthen the foundation for long-term collaboration. To maximize the benefits of Chinese investment and foreign investment more broadly Bangladesh must focus on robust policy reforms. Strengthening governance and regulatory frameworks should be a national priority. Clear, predictable, and transparent energy policies will help minimize uncertainties and build investor confidence. Streamlining approval processes, reducing bureaucratic bottlenecks, and improving coordination between agencies like the Power Division, SREDA, BERC, and the Ministry of Finance can significantly accelerate project timelines.Bangladesh must also ensure that all foreign-funded renewable energy projects integrate strict environmental standards, social safeguards, and community participation. Local capacity-building is equally essential; long-term success will depend on developing skilled engineers, technicians, and policymakers capable of independently managing renewable energy technologies. Finally, ensuring that investments create equitable and inclusive benefits, especially for local communities will be key to maintaining public support for the renewable energy transition. As Bangladesh strives to achieve SDG 7, secure its energy future, and align with global net-zero ambitions, cooperation with China offers immense potential. With strategic reforms, careful risk management, and a strong commitment to transparency and sustainability, Chinese investment can play a transformative role in shaping a cleaner, more resilient, and prosperous energy future for Bangladesh.
(Dr. Muhammad Badrul Hasan is an Associate Professor in the Department of Political Science at the University of Dhaka. He writes articles for Just Energy News. He can be reached at [email protected])