Bangladesh Unveils Ambitious Renewable Energy Policy to Decarbonize Electricity Sector

Bangladesh, a nation with vast renewable energy potential, has recently launched the Renewable Energy Policy 2025, a framework aimed at increasing its share of renewable energy in the electricity mix to 20% by 2030 and 30% by 2040. This strategic pivot is aligned with national plans such as the Integrated Energy and Power Master Plan (IEPMP) and international climate commitments under the Paris Agreement. The policy's vision is to decarbonize the energy sector, reduce reliance on fossil fuels, and foster a resilient, low-carbon economy.

Key Takeaways:

• The policy sets ambitious goals: 6,145 MW RE capacity by 2030 and 17,470 MW by 2041, with a diverse mix of RE sources, including solar, wind, biomass, waste-to-energy, biofuels, geothermal, tidal, hydro, and green hydrogen.
• Solar dominates the current RE landscape, accounting for over 80% of installed capacity, with 1,265 MW already in place.
• The government has introduced 10-year corporate tax exemptions, import duty waivers on solar components, and net metering guidelines to support these targets.
• The Sustainable and Renewable Energy Development Authority (SREDA) is designated as the nodal agency for developing RE roadmaps, introducing Renewable Energy Certificates, and overseeing quality control and research labs for RE equipment.
• However, experts warn that the policy may fall short without robust execution, citing challenges such as policy instability, limited foreign investment, and poor participation in bidding rounds due to the removal of payment guarantee clauses from tenders.

Statistics:

• Current RE capacity: 1,563 MW, or 5.6% of total electricity generation, far below the 10% target set in the 2008 policy.
• Bangladesh must add 750 MW annually to meet the 2030 goal, a pace it has never achieved.
• Only 400 MW utility-scale projects are under construction, and foreign investment remains limited due to policy instability.
• The policy lacks specificity on priority technologies and fails to address the urgency of transitioning from imported fossil fuels.

Sources:

• "Bangladesh Unveils Ambitious Renewable Energy Policy to Decarbonize Electricity Sector," citing the Renewable Energy Policy 2025 document.
• Sharif Jamil, Member Secretary of Dhoritri Rokhhay Amra (DHORA), in an interview, mentioning the policy's lack of specificity and failure to address the urgency of transitioning from fossil fuels.
• Hasan Mehedi, Chief Executive of Coastal Livelihood and Environmental Action Network (CLEAN), in an article, highlighting the need for generation-based targets rather than installed capacity and criticizing the absence of a financing roadmap.
• Shafiqul Alam, Lead Analyst at the Institute for Energy Economics and Financial Analysis (IEEFA), in a report, stressing the importance of a time-based action plan and institutional strengthening.
• Kazi Ahsan Uddin, USAID energy expert, in an interview, describing the policy as a "potential game-changer" but warning that without institutional reform, budget prioritization, and cross-sector coordination, its transformative potential would remain unrealized.