Investment Needs for Renewable Energy in Bangladesh
Citation: Raihan, S., Hossain, I., Hasan, E., & Ahmed, M. T. (2025). Investment Needs for Renewable Energy in Bangladesh. SANEM Publications, Dhaka, Bangladesh.
Bangladesh stands at a crucial point in its energy transition as it strives to meet growing energy demand sustainably while reducing dependence on fossil fuels. This report assesses the investment needs and strategic pathways for transitioning to renewable energy in the power sector by 2041. It analyses global renewable energy trends, evaluates Bangladesh’s existing energy infrastructure, and estimates the financial requirements for three potential renewable energy scenarios using economic models such as CAGR and LCOE.
Currently, renewable energy contributes only around 5% of Bangladesh’s electricity generation, with solar accounting for most of it. To meet rising energy demand and ensure energy security, significant investment and policy reform are essential. The report outlines three transition scenarios: (1) achieving 40,000 MW renewable capacity by 2041 under the Mujib Climate Prosperity Plan (USD 60–76 billion investment), (2) attaining an 11% renewable share under the Integrated Energy and Power Master Plan (USD 11–14 billion), and (3) a near-complete renewable transition excluding the base load (USD 75–95 billion). Scenario 3 is the most ambitious, requiring extensive investment in solar, wind, and energy storage infrastructure, along with grid modernization.
Key challenges include the intermittency of renewable energy sources, high storage costs, outdated grid systems, regulatory bottlenecks, and barriers to land acquisition and private investment. Addressing these requires upgrading transmission networks, simplifying regulations, and offering clear long-term incentives for investors.
The report recommends multiple financing mechanisms, including public-private partnerships, green bonds, concessional financing from institutions such as the World Bank and ADB, and a dedicated renewable energy fund combining public and private capital. By adopting these strategies, Bangladesh can attract investment, accelerate renewable energy deployment, and strengthen energy security—paving the way toward a sustainable, low-carbon future consistent with national development and climate goals.